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Are Social Ties Always Valuable to Knowledge Search? Contextualizing Knowledge Search by Foreign Subsidiary Executives in an Emerging Economy

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Abstract

The extant research of cross-border knowledge acquisition by multinational enterprises often assumes away the role of local contexts within which knowledge acquisition occurs. To extend this line of research, this study contextualizes the knowledge search by foreign subsidiary executives to examine the contingency value of social ties. The results based on the multilevel analyses of both micro (433 dyad ties) and macro effects of the regional knowledge environment (26 provinces) provide support for the hypotheses that, though close social ties facilitated knowledge search as predicted by social capital theory, the utility value of social ties for knowledge search tends to be attenuated in the regions with high level of social capital and FDI density.

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Notes

  1. Technology cluster is different from learning region. Learning region is a broader context primarily referring to a geographic area endowed with knowledge-facilitative social and economic institutions. In this sense, technology cluster can be a subset of the learning region.

  2. In our survey based on the random sample, we do not exclude respondents who are Chinese by ethnicity for the reasons: (1) we target respondents who are executives representing foreign subsidiaries even though some of them happen to be Chinese by ethnicity. (2) Among these executives of Chinese ethnicity, there may be a mix of different types such as some are descendants of Chinese but were born and grew up in another country (e.g., US, UK etc.), some are Chinese but studied and lived in a foreign country and are expatriated on job assignments in China, some could be a “third-country national” in international human resource term, who are Chinese ethnicity hired by a MNE to manage the operation in China (e.g., a Singaporean works for GE in China).

  3. While social capital can be measured in many ways, the review of social capital research by Nahapiet and Ghoshal (1998) conceptualizes social capital consists of structural (the proper-ties of the social system and of the network of relations as a whole), the relational (the kind of personal relation-ships people have developed with each other through a history of interactions, and the cognitive (shared representations, interpretations, and systems of meaning among parties dimensions. The extant studies have used variety of ways to measure the relational dimension of social capital at various levels. Just to name a few, for example, Ellis (2000) studied the impact of personal relationships established through business interactions market entry and export initiation. Zhao and Hsu (2007) examined the effects of family-based personal ties on resource commitment and timing of entry. At the national level, Knack and Keefer (1997) measured the “associative aspect” of social capital based on nine items from World Value Survey (WVS).

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Acknowledgments

This research is partially supported by the summer research grant from John Cook School of Business of St. Louis University.

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  1. John Cook School of Business, St. Louis University, St. Louis, USA

    Hongxin Zhao

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Appendix

Appendix

1.1 Appendix 1. A: (filled by principal respondents) (Burt 2002)

Contact recall: This question asks about your non-work-related social contacts. Social contacts refer to your personal connections with individuals who are OUTSIDE your subsidiary and whom you are acquainted with through non-work related interactions (such as social events, trade and industry associations, professional meetings/conferences, etc.). Provide their name and contact information in the following table.

(1) Name

(2) Work address

(3) Phone/Fax number/email

(4) Assess your relation with the identified

1.2 Appendix 1. B:

Search tendency: This question is about the use of your social contacts as identified above. From time to time, people discuss important matters with other people, people you maintain close and frequent contacts. The important work-related matters that you may seek advice and expertise from your local social contacts range from business behavior/practice issues of competitors, suppliers and buyers, government and institution-related, and cultural/social issues. When you encounter one or a combination of these issues in your work, how likely are you in seeking from the above listed individuals their insights, interpretation, advice, opinions and know-how on each of the following specific issues: (1 = least likely; 2 = unlikely; 3 = likely; 4 = very much likely; 5 = highly likely):

Institutional knowledge (adapted from Eriksson et al. 1997)

  • Interpreting regulatory changes

  • Building government relations

  • Interpreting social and cultural cues you encounter

  • Interpreting the general trend of economy

1.3 Appendix 2:

External tie strength: (filled by both identified alters and principal respondents) (individual level) (Hansen 1999; Marsden and Campbell 1984)

  • 1. How frequently do you communicate with them (using email, phone, informal visits, social events, etc.) (0 = once every 3 month; 1 = once every 3 months 1 = once every 2 months; 2 = once a month; 3 = twice a month; 4 = once a week; 5 = twice a week; 6 = once a day)

  • 2. How close is your relationship with him/her (the principal respondent)? (0 = far distant; 1 = distant 2 = distantly close; 3 = somewhat close; 4 = close; 5 = very close; 6 = intimately close).

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Zhao, H. Are Social Ties Always Valuable to Knowledge Search? Contextualizing Knowledge Search by Foreign Subsidiary Executives in an Emerging Economy. Manag Int Rev 55, 511–538 (2015). https://doi.org/10.1007/s11575-014-0234-3

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  • DOI: https://doi.org/10.1007/s11575-014-0234-3

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