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The double-edged effects of guanxi on partner opportunism

The double-edged effects of guanxi on partner opportunism This study aims to examine the double-edged effects of guanxi on opportunism and the moderating effects of legal enforceability and partner asset specificity. It thus differs from the current literature, which primarily focuses on the benevolent effects of guanxi.Design/methodology/approachBased on matched data collected from 268 sales manager and salesperson dyads, this study tested hypotheses using hierarchical regressions.FindingsThe empirical test supports the conceptual model and demonstrates two findings. First, guanxi between boundary spanners follows an inverted U-shaped relationship with inter-firm opportunism. Second, both the benefits and drawbacks of guanxi are stronger under the condition of low legal enforceability and high partner asset specificity.Research limitations/implicationsThe study did not untangle guanxi into different dimensions and did not investigate how firms should make trade-offs between the benefits and drawbacks of guanxi. Therefore, future research could further explore this question by using a multidimensional approach.Practical implicationsThe study alerts managers that guanxi is a double-edged sword, so they should complement it with formal control mechanisms, particularly when they are operating in legally inefficient regions or when their partner firm’s asset specificity is high.Originality/valueThe study offers a more balanced view of guanxi by showing both its positive and negative effects on opportunism. It also uncovers legal enforceability and partner asset specificity as two boundary conditions that influence the curvilinear effects of guanxi on opportunism. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Business & Industrial Marketing Emerald Publishing

The double-edged effects of guanxi on partner opportunism

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0885-8624
DOI
10.1108/jbim-01-2018-0039
Publisher site
See Article on Publisher Site

Abstract

This study aims to examine the double-edged effects of guanxi on opportunism and the moderating effects of legal enforceability and partner asset specificity. It thus differs from the current literature, which primarily focuses on the benevolent effects of guanxi.Design/methodology/approachBased on matched data collected from 268 sales manager and salesperson dyads, this study tested hypotheses using hierarchical regressions.FindingsThe empirical test supports the conceptual model and demonstrates two findings. First, guanxi between boundary spanners follows an inverted U-shaped relationship with inter-firm opportunism. Second, both the benefits and drawbacks of guanxi are stronger under the condition of low legal enforceability and high partner asset specificity.Research limitations/implicationsThe study did not untangle guanxi into different dimensions and did not investigate how firms should make trade-offs between the benefits and drawbacks of guanxi. Therefore, future research could further explore this question by using a multidimensional approach.Practical implicationsThe study alerts managers that guanxi is a double-edged sword, so they should complement it with formal control mechanisms, particularly when they are operating in legally inefficient regions or when their partner firm’s asset specificity is high.Originality/valueThe study offers a more balanced view of guanxi by showing both its positive and negative effects on opportunism. It also uncovers legal enforceability and partner asset specificity as two boundary conditions that influence the curvilinear effects of guanxi on opportunism.

Journal

Journal of Business & Industrial MarketingEmerald Publishing

Published: Oct 7, 2019

Keywords: Guanxi; Opportunism; Legal enforceability; Asset specificity

References