Globalization, Institutionalization and the Social Foundation of Chinese Business Networks

Globalization, defined as ‘social, economic, cultural, and demographic processes that take place within nations but also transcend them’ (Kearney, 1995, p. 548), has been a central characteristic of the world economy in the late twentieth century. Within this broad context, the globalization of Chinese business firms has constituted one of the dominant forces shaping the nature and characteristics of economic development in the Asia Pacific region, and it has enormous ramifications for the sociopolitical and cultural (re)configurations of the region (Dirlik, 1997; Yeung, 1999a; Olds and Yeung, 1999). It has been generally agreed that Chinese business networks have contributed significantly to the rapid growth of ethnic Chinese economic activities and the internationalization of Chinese business firms (Mackie, 1992a; East Asian Analytical Unit, 1995; Hamilton, 1996; Chapter 4 in this volume). In conceptualizing these networks, however, most studies seem to have placed an overriding emphasis on the informal, uninstitutional, or under-institutionalized aspects of business networking and to have paid little attention to formal institutionalization.1 These networks are described as being ‘composed mostly of family firms’ and as something possessing ‘no head, no organization, no politics, and no central “brain”’ (see also Chapter 2 in this volume).