Transaction Cost, Social Capital and Firms' Synergy Creation in Chinese Business Networks: An Integrative Approach

Citation data:

Asia Pacific Journal of Management, ISSN: 0217-4561, Vol: 21, Issue: 3, Page: 325-343

Publication Year:
2004
Usage 454
Abstract Views 278
Full Text Views 155
Link-outs 21
Captures 124
Exports-Saves 104
Readers 20
Citations 34
Citation Indexes 34
Repository URL:
http://commons.ln.edu.hk/sw_master/7132
DOI:
10.1023/b:apjm.0000036466.90433.92
Author(s):
WU, Wei Ping; CHOI, W. L.
Publisher(s):
Springer Nature
Tags:
Business, Management and Accounting; Economics, Econometrics and Finance; Chinese business networks; Interorganisational relationship; Social capital; Synergy creation; Transaction cost
article description
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. © 2004 Kluwer Academic Publishers.