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The Role of the Guanxi Institution in Skill Acquisition Between Firms: A Study of Chinese Firms

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  • Shaohan Cai
  • Zhilin Yang

Abstract

type="main" xml:id="jscm12035-abs-0001"> The prevalence of personal connections in China, or guanxi, constitutes an institution that governs how people exchange favors. This study explores the effects of the guanxi institution on interfirm relational ties, information sharing, and the acquisition of skills across firms. According to social network theory, the marginal benefit of interfirm relational ties on information sharing should decrease with the strength of ties; according to information overload theory, information sharing should have an inverted U-shaped effect on the acquisition of skills. Institutional theory further suggests that the links across these three constructs are subject to the influence of the guanxi institution. With data collected from 338 manufacturing companies, this study shows that the links differ across environments that have strong versus weak guanxi institutions. A strong guanxi institution generally promotes information sharing and skill acquisition, but it also has a dark side.

Suggested Citation

  • Shaohan Cai & Zhilin Yang, 2014. "The Role of the Guanxi Institution in Skill Acquisition Between Firms: A Study of Chinese Firms," Journal of Supply Chain Management, Institute for Supply Management, vol. 50(4), pages 3-23, October.
    • Handle: RePEc:bla:jscmgt:v:50:y:2014:i:4:p:3-23
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    File URL: http://hdl.handle.net/10.1111/jscm.2014.50.issue-4
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    Citations

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    Cited by:

    1. Niels J. Pulles & Raymond P.A. Loohuis, 2020. "Managing Buyer‐Supplier Conflicts: The Effect of Buyer Openness And Directness On A Supplier's Willingness to Adapt," Journal of Supply Chain Management, Institute for Supply Management, vol. 56(4), pages 65-81, October.
    2. Zhu, Qinghua & Lai, Kee-hung, 2019. "Enhancing supply chain operations with extended corporate social responsibility practices by multinational enterprises: Social capital perspective from Chinese suppliers," International Journal of Production Economics, Elsevier, vol. 213(C), pages 1-12.
    3. Shaohan Cai & Minjoon Jun & Zhilin Yang, 2017. "The Effects of Boundary Spanners’ Personal Relationships on Interfirm Collaboration and Conflict: A Study of the Role of Guanxi in China," Journal of Supply Chain Management, Institute for Supply Management, vol. 53(3), pages 19-40, July.
    4. Cao, Qing & Baker, Jeff & Schniederjans, Dara, 2014. "Bullwhip effect reduction and improved business performance through guanxi: An empirical study," International Journal of Production Economics, Elsevier, vol. 158(C), pages 217-230.
    5. Chung-Yean Chiang & Mark Hanna & Zhenyu Liu & Xiangyu Lu, 2018. "Obtaining collaboration benefits: the role of collaboration-specific investment and absorptive capacity in China," Operations Management Research, Springer, vol. 11(3), pages 69-82, December.
    6. Huo, Baofeng & Gu, Minhao & Jiang, Bin, 2018. "China-related POM research: Literature review and suggestions for future research," International Journal of Production Economics, Elsevier, vol. 203(C), pages 134-153.

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