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Handbook of Research on Asian Business

Edited by Henry Wai-chung Yeung

The rise of Asia as an important region for global business has been widely recognized as one of the most significant economic phenomena in the new millennium. This accessible and comprehensive Handbook brings together state-of-the-art reviews of Asian business in an expansive range of areas including: business organizations; strategic management; marketing; state–business relations; business and development; and business policy issues.
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Chapter 4: Guanxi as the Chinese Norm for Personalized Social Capital: Toward an Integrated Duality Framework of Informal Exchange

Peter Ping Li


Peter Ping Li The apparent success of China’s economic transition and its unique institutional context has attracted growing academic interest in recent years (for example Tsui et al., 2004). The focus of the research is on how to explain the institutional context for China’s successful economic transition (Boisot and Child, 1996; Cao et al., 1999; Li, 2005a). The commonly evoked notion for explaining China’s institutional context and its reform experience is guanxi (loosely translated as ‘personal ties’), but there are debates about its nature, content, process, antecedents and consequences (see Gold et al., 2002 for a review). Besides, there is much conceptual confusion regarding the distinction and similarity between guanxi and social capital (Gold et al., 2002; Lin, 2001a), while the study of social capital suffers from conceptual confusions regarding the level of analysis, content and process (Adler and Kwon, 2002; Burt, 2001; Lin, 1999, 2001b; Portes, 1998; Woolcock, 1998). A systematic research on guanxi could shed new light on not only the reform experience of China, but also the debates over guanxi and social capital. Further, both guanxi and social capital are informal norms (Adler and Kwon, 2002; Li, 1998), whose roles have been largely neglected, especially its links with formal ones (Li, 2005a; Pejovich, 1999). Hence, the significance of guanxi as an informal norm lies in its potentials for the development of more geocentric theories by integrating the distinctions and interactions between formal and informal institutions across countries (Boisot and Child, 1996; Li, 1998; Lovett et...

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