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The contingent impacts of market and nonmarket ties on the exchange relationship formation: Chinese automotive industry

Khan-Pyo Lee (Sogang Business School Sogang University, Seoul, Korea)
Seong-Jin Choi (School of Business , Hanyang University, Seoul, Korea)

Chinese Management Studies

ISSN: 1750-614X

Article publication date: 2 November 2015

313

Abstract

Purpose

This paper aims to present inter-firm networks in China by examining the impacts of previous market ties, nonmarket ties, and more importantly their interaction on the formation of exchange relationships.

Design/methodology/approach

The authors test their hypotheses using inter-firm exchange relationships between 19 automakers and 312 suppliers in China. The authors conducted empirical tests with multilevel logit model.

Findings

The authors find that both previous nonmarket ties and market ties have positive impacts on the formation of the next exchange relationships, while market ties and nonmarket ties are substitutes in the exchange relationships formation.

Originality/value

This paper provides unique theoretical framework on how firms in emerging markets promote the knowledge exchange with help of market and nonmarket ties. Especially, our findings on the substitute effects between networks have important practical implications to understand the historical development of exchange relationship in transition economies, such as in China.

Keywords

Acknowledgements

This work was supported by the research fund of Hanyang University (HY-2015).

Citation

Lee, K.-P. and Choi, S.-J. (2015), "The contingent impacts of market and nonmarket ties on the exchange relationship formation: Chinese automotive industry", Chinese Management Studies, Vol. 9 No. 4, pp. 648-663. https://doi.org/10.1108/CMS-03-2014-0044

Publisher

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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