Asia Pacific Journal of Management

, Volume 36, Issue 2, pp 499–527 | Cite as

Syndication through social embeddedness: A comparison of foreign, private and state-owned venture capital (VC) firms

  • Jar-Der Luo
  • Ke RongEmail author
  • Kunhao Yang
  • Rong Guo
  • YaQi Zou


This paper explores the different syndication behavior in various types of Chinese venture capitals (VC), in particular it focuses on foreign, private-owned and state-owned VC firms and these firms’ behavior when faced with institutional uncertainties. Mixed methods data analysis was conducted using the Simuton database of 1,173 VC firms and snowball interviews were also conducted in the Chinese state-owned and private-owned VCs as well as foreign VCs. Findings indicate foreign VC investors are more willing to build much denser relationships than those of Chinese state-owned and private VC firms in order to overcome the uncertainty. This result provides additional evidence that adopting close relationships or a guanxi-based (informal social network) strategy does not only depend on cultural issues such as East Asian culture, but also on high institutional uncertainty. Furthermore, this paper develops four propositions on how VC firms establish syndication influenced by high institutional uncertainty. Finally, the conclusion and discussion sections put forward implications to VC companies about how informal social networks facilitate the internationalization process and growth in foreign markets.


Guanxi (informal social network) Venture capital (VC) Syndication Liability of foreignness State-owned Social embeddedness 



We are grateful for the financial support of Center for Social Network Research, Tsinghua University and Tsinghua’s research project “Trust and Guanxi Studies on Internet,” Project No. 20121088015, as well as the support of Chinese Natural Science Foundation Project “Social Network in Big Data Analysis: A Case in Investment Network,” Project No. 71372053 and 71402051, and National 863 Project No. 20141860074.


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  • Jar-Der Luo
    • 1
  • Ke Rong
    • 2
    Email author
  • Kunhao Yang
    • 1
  • Rong Guo
    • 3
  • YaQi Zou
    • 1
  1. 1.Department of Sociology, School of Social ScienceTsinghua UniversityBeijingChina
  2. 2.Institute of Economics, School of Social ScienceTsinghua UniversityBeijingChina
  3. 3.Institute of Science and Technology Investment, Ministry of Science and TechnologyChinese Academy of Science and Technology for Development (CASTED)BeijingChina

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