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

Author

Listed:
  • 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.

Suggested Citation

  • Fei Song & C. Bram Cadsby & Yunyun Bi, 2012. "Trust, Reciprocity, and Guanxi in China: An Experimental Investigation," Working Papers 1204, University of Guelph, Department of Economics and Finance.
  • Handle: RePEc:gue:guelph:2012-04.
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    References listed on IDEAS

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    Cited by:

    1. Cadsby, C. Bram & Du, Ninghua & Song, Fei, 2016. "In-group favoritism and moral decision-making," Journal of Economic Behavior & Organization, Elsevier, vol. 128(C), pages 59-71.
    2. Francisco B. Galarza, 2017. "Trust and Trustworthiness in College: An Experimental Analysis," Working Papers 17-03, Centro de Investigación, Universidad del Pacífico.
    3. Long Zhang & Yulin Deng & Xin Zhang & Enhua Hu, 2016. "Why do Chinese employees build supervisor-subordinate guanxi? A motivational analysis," Asia Pacific Journal of Management, Springer, vol. 33(3), pages 617-648, September.
    4. 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.
    5. Sven Horak & Markus Taube, 2016. "Same but different? Similarities and fundamental differences of informal social networks in China (guanxi) and Korea (yongo)," Asia Pacific Journal of Management, Springer, vol. 33(3), pages 595-616, September.
    6. Cadsby, C. Bram & Du, Ninghua & Song, Fei & Yao, Lan, 2015. "Promise keeping, relational closeness, and identifiability: An experimental investigation in China," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 120-133.
    7. Yumei He & Jonas Fooken & Uwe Dulleck, 2015. "Facing a changing labour force in China: Determinants of trust and reciprocity in an experimental labour market," Economics Bulletin, AccessEcon, vol. 35(3), pages 1525-1530.
    8. Lin, Feng-Jyh & Lin, Yi-Hsin, 2016. "The effect of network relationship on the performance of SMEs," Journal of Business Research, Elsevier, vol. 69(5), pages 1780-1784.

    More about this item

    Keywords

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

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D69 - Microeconomics - - Welfare Economics - - - Other

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