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

Wei Ping WU, W. L. CHOI

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

37 Citations (Scopus)

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.
Original languageEnglish
Pages (from-to)325-343
Number of pages19
JournalAsia Pacific Journal of Management
Volume21
Issue number3
DOIs
Publication statusPublished - 1 Sep 2004

Fingerprint

Business networks
Synergy
Transaction costs
Social capital
Local economy
Multiple regression
Hypothesis test
Manufacturing firms
Financial institutions
Interorganizational relationships
Information sharing
Greater China
Knowledge gap
Economic capital
Uncertainty
Government
Hong Kong
Transaction cost economics
Regression method
South-East Asia

Keywords

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

Cite this

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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.",
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Transaction cost, social capital and firms' synergy creation in Chinese business networks : an integrative approach. / WU, Wei Ping; CHOI, W. L.

In: Asia Pacific Journal of Management, Vol. 21, No. 3, 01.09.2004, p. 325-343.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

TY - JOUR

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AU - CHOI, W. L.

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N2 - 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.

AB - 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.

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