More or less guanxi: Trust is 60% network context, 10% individual difference

Ronald S. Burt, Yanjie Bian, Sonja Opper

Research output: Contribution to journalArticlepeer-review

66 Scopus citations

Abstract

The strong ties known in China as guanxi can be distinguished by a high level of trust relatively independent of the surrounding social structure. Using network data from a stratified probability sample of 700 entrepreneurs citing 4664 contacts, we study guanxi relative to other relations to learn how much individual differences such as well-being, business differences, political participation and demographic factors matter for the guanxi distinction. Two findings stand out: First, the connection between trust and social network is robust to most differences between individuals, especially business and political differences. Trust variance is 60% network context, and 10% individual differences. Trust increases within a relationship as network closure increases around the relationship, but some relationships mature into guanxi ties within which trust is high and relatively independent of the surrounding social structure. Second, when individual differences matter, they concern social isolation. Guanxi ties are more distinct in the networks around entrepreneurs with small, marginal families, and around those with small, closed networks. Both categories of entrepreneurs are likely to experience difficulties with respect to resource access and doing business with people beyond their network, which may explain why longstanding guanxi ties linked to important events are particularly distinct for these entrepreneurs.

Original languageEnglish (US)
Pages (from-to)12-25
Number of pages14
JournalSocial Networks
Volume54
DOIs
StatePublished - Jul 2018

Bibliographical note

Funding Information:
Ronald Burt is grateful to the University of Chicago Booth School of Business for financial support during the work reported here. Sonja Opper is grateful to the Marianne and Marcus Wallenberg Foundation for support of this work. We are grateful to the Jan Wallanders and Tom Hedelius Foundation for the grant to Sonja Opper that funded the fieldwork in China providing the data analyzed here. The text has benefitted from Na Zou’s comments, and comments received during the 2017 Macro Organizational Behavior Society meetings at the Harvard Business School, and a research seminar at Bocconi University. This manuscript, supplement materials, and the network instrument in English are available online: http://faculty.chicagobooth.edu/ronald.burt/research .

Publisher Copyright:
© 2017 Elsevier B.V.

Keywords

  • Entrepreneurs
  • Guanxi
  • Network closure
  • Social isolation
  • Trust

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