Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30059
Authors: 
Bickenbach, Frank
Liu, Wan-Hsin
Year of Publication: 
2010
Series/Report no.: 
Kiel working paper 1589
Abstract: 
This paper investigates the role of personal relationships for doing business in the Greater Pearl River Delta, China. First, it discusses the interplay of formal and informal (relationship-based) institutions from the point of view of institutional economics, with a focus on economies with weak formal contracting and property rights institutions. Second, it describes the institutional environment for doing business in China, and in the PRD in particular. Third, it uses data obtained from a survey among executives of Hong Kong electronics SMEs with business operations in the PRD to gain insights into their perceptions on the importance and the motives of using personal relationships for business in PRD in general, and on the impact of personal relationships on different strategic business decisions (on location, partner, and formal governance structures) for companies’ production as well as innovation activities. The results confirm the importance of personal relationships for doing business in the PRD, in general. There is evidence of substantial differences as to the role of personal relationships between production and innovation activities.
Subjects: 
Personal relationships
formal and informal institutions
production
innovation
China
company survey
JEL: 
L20
L63
P0
Document Type: 
Working Paper

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