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Network triads: transitivity, referral and venture capital decisions in China and Russia

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  • Bat Batjargal

    ([1] Harvard University, Cambridge, USA [2] Guanghua School of Management, Peking University, Beijing, P.R. China)

Abstract

This article examines the effects of dyadic ties and interpersonal trust on referrals and investment decisions of venture capitalists in the Chinese and Russian contexts. The study uses the postulate of transitivity of social network theory as a conceptual framework. The findings reveal that referee–venture capitalist tie, referee–entrepreneur tie, and interpersonal trust between referee and venture capitalist have positive effects on referrals and investment decisions of venture capitalists. The institutional, social and cultural differences between China and Russia have minimal effects on referrals. Interpersonal trust has positive effects on investment decisions in Russia. Journal of International Business Studies (2007) 38, 998–1012. doi:10.1057/palgrave.jibs.8400302

Suggested Citation

  • Bat Batjargal, 2007. "Network triads: transitivity, referral and venture capital decisions in China and Russia," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(6), pages 998-1012, November.
  • Handle: RePEc:pal:jintbs:v:38:y:2007:i:6:p:998-1012
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    Citations

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    Cited by:

    1. Olivier Blanchard & Michael Kremer, 1997. "Disorganization," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1091-1126.
    2. Yeniyurt, Sengun & Carnovale, Steven, 2017. "Global supply network embeddedness and power: An analysis of international joint venture formations," International Business Review, Elsevier, vol. 26(2), pages 203-213.
    3. Daria Volchek & Ari Jantunen & Sami Saarenketo, 2013. "The institutional environment for international entrepreneurship in Russia: Reflections on growth decisions and performance in SMEs," Journal of International Entrepreneurship, Springer, vol. 11(4), pages 320-350, December.
    4. Sheila Puffer & Daniel McCarthy & Alfred Jaeger & Denise Dunlap, 2013. "The use of favors by emerging market managers: Facilitator or inhibitor of international expansion?," Asia Pacific Journal of Management, Springer, vol. 30(2), pages 327-349, June.
    5. Hom, Peter W. & Xiao, Zhixing, 2011. "Embedding social networks: How guanxi ties reinforce Chinese employees’ retention," Organizational Behavior and Human Decision Processes, Elsevier, vol. 116(2), pages 188-202.
    6. Daniel McCarthy & Sheila Puffer & Denise Dunlap & Alfred Jaeger, 2012. "A Stakeholder Approach to the Ethicality of BRIC-firm Managers’ Use of Favors," Journal of Business Ethics, Springer, vol. 109(1), pages 27-38, August.
    7. Bat Batjargal, 2012. "The Effects Of Network???S Structural Holes: Polycentric Institutions, Product Portfolio, And New Venture Growth In China And Russia," William Davidson Institute Working Papers Series wp1033, William Davidson Institute at the University of Michigan.
    8. Michael A. Hitt & Tiago Ratinho, 2011. "The Multifaceted Effects of Institutions on Firm Strategies and Entrepreneurial Actions," Chapters,in: The Nature of the New Firm, chapter 4 Edward Elgar Publishing.
    9. Li, Dan & Miller, Stewart R. & Eden, Lorraine & Hitt, Michael A., 2012. "The Impact of Rule of Law on Market Value Creation for Local Alliance Partners in BRIC Countries," Journal of International Management, Elsevier, vol. 18(4), pages 305-321.
    10. Boris Bauke & Thorsten Semrau & Zheng Han, 2016. "Relational trust and new ventures’ performance: the moderating impact of national-level institutional weakness," International Entrepreneurship and Management Journal, Springer, vol. 12(4), pages 1007-1024, December.
    11. Dmitry Khanin & Kristie Ogilvie & David Leibsohn, 2012. "International entrepreneurship, venture capital networks, and reinvestment decisions," Journal of International Entrepreneurship, Springer, vol. 10(1), pages 1-24, March.
    12. Wafa N. Almobaireek & Ahmed A. Alshumaimeri & Tatiana S. Manolova, 2016. "Building entrepreneurial inter-firm networks in an emerging economy: the role of cognitive legitimacy," International Entrepreneurship and Management Journal, Springer, vol. 12(1), pages 87-114, March.
    13. Gao, Lan & Liu, Xiaohui & Zou, Huan, 2013. "The role of human mobility in promoting Chinese outward FDI: A neglected factor?," International Business Review, Elsevier, vol. 22(2), pages 437-449.
    14. Michael Rochlitz, 2016. "Collective Action Abroad: How Foreign Investors Organize Evidence from Foreign Business Associations In the Russian Federation," HSE Working papers WP BRP 32/PS/2016, National Research University Higher School of Economics.
    15. Bat Batjargal, 2013. "Institutional Polycentrism, Entrepreneurs??? Social Networks, And New Venture Growth," William Davidson Institute Working Papers Series wp1060, William Davidson Institute at the University of Michigan.
    16. Kiss, Andreea N. & Danis, Wade M. & Cavusgil, S. Tamer, 2012. "International entrepreneurship research in emerging economies: A critical review and research agenda," Journal of Business Venturing, Elsevier, vol. 27(2), pages 266-290.
    17. Zhang, Jing & Pezeshkan, Amir, 2016. "Host country network, industry experience, and international alliance formation: Evidence from the venture capital industry," Journal of World Business, Elsevier, vol. 51(2), pages 264-277.

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