Entrepreneurs and Social Capital in China

Abstract

Does social capital operate differently in China? A long and vibrant literature on the concept of guanxi suggests not only that social capital might have a different character in China but also that it might prove more valuable there to employees and entrepreneurs alike. Drawing on unusually high quality data on Chinese executives, Burt and Burzynska (2017) explore the question of whether the same structural configurations of relationships appear associated with success in China as have been found in the West. Their short answer is yes. As in the West, the founders and managers of larger companies have relationships characterized by a larger proportion of ‘structural holes’ – where the focal individual represents the only connection between his or her contacts (in other words, a brokering relationship). Closure – having multiple ties in common with another individual – meanwhile appears to foster trust, just as it does elsewhere. One could therefore view the results as strong evidence for the universality of a structural approach to social capital, one based on the patterns of relationships between individuals (e.g., Burt, 1992; Coleman, 1988; Podolny, 1993).