Drawing on social capital theory, this study explores how two types of guanxi - with business partners and with government officials -affect corporate capabilities differently, and examines their contingent value. The results from a survey of 409 firms in China indicate that the two guanxi types differ in the extent to which they contribute to corporate resource-bridging and adaptive capabilities. Specifically, guanxi with government officials is positively associated with resource-bridging capability but not with adaptive capability, whereas guanxi with business partners contributes to both resource-bridging capability and adaptive capability. We also find that technological turbulence weakens the impact of guanxi with government officials on capability building, but strengthens the effect of guanxi with business partners on the establishment of corporate capabilities. In addition, the two types of guanxi are mutually reinforcing in their impacts on respective capability building. © 2010 Elsevier Inc.
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