Technology Acquisition and Business Performance Under Guanxi: The Moderating Role of Business Networks and Government Relationships in China

Abstract

Much previous work has been done to show both the effect of technological knowledge acquisition on firm performance as well as the role of networks on firm performance. The purpose of this research is to analyze the network as a means of moderating the knowledge acquisition/firm performance continuum. Similarly, we attempt to introduce government relationships as another extracurricular source the firm can tap into in order to affect firm performance. We find that business networks tend to have a significant effect on competitive advantage, both as a direct effect and as a moderator, but have no effect on market share in either way. Additionally, we find that governmental relationships tend to increase market share, but they decrease the differentiability of the firm’s products with those of its competitors.