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Trust, Reciprocity, and Guanxi in China: An Experimental Investigation

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Author Info

  • Fei Song

    ()
    (Ted Rogers School of Management, Ryerson University)

  • C. Bram Cadsby

    ()
    (Department of Economics, University of Guelph)

  • Yunyun Bi

    ()
    (Taiping Asset Management, Shanghai, China)

Abstract

We examine the influence of social distance on levels of trust and reciprocity in China. Social distance, reflected in the indigenous concept of guanxi, is of central importance to Chinese culture. In Study 1, some participants participated in two financially salient trust games to measure behavior, one with an anonymous classmate and the other with an anonymous, demographically identical nonclassmate. Other participants, drawn from the same population, completed hypothetical surveys to gauge both hypothetical behavior and expectations of others. Social distance effects on actual and hypothetical behavior were statistically consistent. The results together corroborated the hypothesized negative relationship between trust and social distance. However, reciprocity was not responsive to social distance. Study 2 found that affect-based trust, but not cognition-based trust, played a mediating role in the relationship between social distance and interpersonal trust in a hypothetical scenario. We conclude that close guanxi ties in China engender affect-based trust, which is extended to shouren classmates. This is true despite the fact that no more cognition-based trust is placed nor reciprocity received or expected from classmates compared to demographically identical shengren nonclassmates.

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Bibliographic Info

Paper provided by University of Guelph, Department of Economics and Finance in its series Working Papers with number 1204.

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Length: 37 pages
Date of creation: 2012
Date of revision:
Publication status: Published in Management and Organization Review (2012), Vol. 8, 2, 397-421.
Handle: RePEc:gue:guelph:2012-04.

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Keywords: Experiment; Affect-based Trust; China; Guanxi; Reciprocity; Trust; Social Distance;

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References

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  1. Gunnthorsdottir, Anna & McCabe, Kevin & Smith, Vernon, 2002. "Using the Machiavellianism instrument to predict trustworthiness in a bargaining game," Journal of Economic Psychology, Elsevier, vol. 23(1), pages 49-66, February.
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  8. Daniel Z. Levin & Rob Cross, 2004. "The Strength of Weak Ties You Can Trust: The Mediating Role of Trust in Effective Knowledge Transfer," Management Science, INFORMS, vol. 50(11), pages 1477-1490, November.
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  12. Roy Y J Chua & Michael W Morris & Paul Ingram, 2009. "Guanxi vs networking: Distinctive configurations of affect- and cognition-based trust in the networks of Chinese vs American managers," Journal of International Business Studies, Palgrave Macmillan, vol. 40(3), pages 490-508, April.
  13. James C. Cox & Cary A. Deck, 2005. "On the Nature of Reciprocal Motives," Economic Inquiry, Western Economic Association International, vol. 43(3), pages 623-635, July.
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Cited by:
  1. Liang, Pinghan & Meng, Juanjuan, 2013. "Love me, love my dog: an experimental study on social connections and indirect reciprocity," MPRA Paper 45270, University Library of Munich, Germany.

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