Transaction cost, social capital and firms' synergy creation in Chinese business networks : an integrative approach

Document Type

Journal article

Source Publication

Asia Pacific Journal of Management

Publication Date

9-1-2004

Volume

21

Issue

3

First Page

325

Last Page

343

Keywords

Chinese business networks, Interorganisational relationship, Social capital, Synergy creation, Transaction cost

Abstract

Overseas Chinese business networks have been a powerful growth engine propelling local economies in Southeast Asia and the Greater China region. However, relatively little research has been conducted on the relationship between social capital and a firm's synergy creation in overseas Chinese business networks. To narrow this knowledge gap, this study adopts an integrative approach drawing on two complementary theories of transaction cost economics (TCE) and social capital to investigate how a firm creates synergy in overseas Chinese business networks. A multiple regression method was used to test hypotheses. The results indicate that repeat transactions and close ties with government offices and financial institutions contributed positively towards a firm's synergy creation while other variables such as trust, transaction uncertainty and information sharing did not show any significant relationship with synergy creation. Data from 108 Hong Kong-based Chinese manufacturing firms provide evidence that the integrative approach is rather effective in studying a firm's synergy creation in the context of interorganisational relationships.

DOI

10.1023/B:APJM.0000036466.90433.92

Print ISSN

02174561

Publisher Statement

Copyright © 2004 Kluwer Academic Publishers. Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Language

English

Recommended Citation

Wu, W.-P., & Choi, W. L. (2004). Transaction cost, social capital and firms' synergy creation in Chinese business networks: An integrative approach. Asia Pacific Journal of Management, 21(3), 325-343. doi: 10.1023/B:APJM.0000036466.90433.92

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