Abstract: We conceptualize that business entertainment as the mechanism that transforms unrelated personal ties into structured gray relational capital of firms in such a way that business entertainment facilitates business transactions in the informal-formal hybrid economies. Because business entertainment is used to fulfill transaction-specific and short-term objectives, we further contend that business entertainment substitutes firm pro-market actions in emerging economies. A stream of regression models was employed with 5,646 firms from World Bank archival data to examine these relationships. Results indicate that business entertainment increases performance but that the positive effects diminish as business entertainment continuously increases. Results also suggest that business entertainment substitutes both R&D investments and formal contracting in explaining firm performance. This study highlights a paradoxical tension between business entertainment and pro-market actions among firms in an emerging economy.

Abstract: Though building “Guanxi” networks is widely considered a crucial strategy in conducting businesses in China, there has rarely been scientific examination of the development process of “Guanxi” network as a whole at the inter-organizational level, not to mention the investigation of its impact on business performance. When it comes to how foreign companies handle “Guanxi” and establish networks of its own to co-opete with Chinese firms, studies become even scarcer, if not none. In an attempt to fill in such a void, this study aims to answer two research questions: How do foreign Guanxi networks (FGN) develop and evolve over time in China? What are the impacts on foreign subsidiary performance of FGN development in China?

Abstract: This research examines the unique role Guanxi (Chinese network capitalism, conjectured as a substitution to formal institution in this research) plays in Western firms’ survival or success in the ever-changing competitive and regulatory environment of contemporary China. Few efforts have been made to elucidate the mechanisms through which dynamic capabilities lead to superior performance. Against this background, this research attempts to offer an alternative view on dynamic capabilities-performance relationship by adopting a Guanxi-as-conduit view. After presenting the L-A-O Guanxi typology, this study, instead of treating Guanxi as the antecedent of performance, addressing Guanxi (both extra-organizational and intra-organizational) as a moderator for the relationship between dynamic capabilities and performance, which is mediated by operational capabilities.

Abstract: Managers in emerging markets are challenged in their business development: institutional voids, rooted in political and economic shocks as well as fast and non-linear institutional change, create risks for economic transactions due to an exposed vulnerability of exchange partners. We argue that a dynamic institutional context, inherent in emerging markets, induces managers in ‘low trust societies’ to rely on trusted business relationships from their personal networks as informal bypasses. We examine the conventional perception of trust, its role, antecedents and consequences for business development in emerging markets. Based on 88 semi-structured interviews conducted with local and expatriate managers in emerging markets we develop propositions by re-modeling trust in emerging markets and identifying similarities with research in network theory: social capital, structural holes and closure.