Building social-capital networks and relationship commitment in China and India

Abstract

Purpose

This study aims to develop a framework based on drew social capital theory and the literature on guanxi to examine and compare a buyer’s willingness to commit to a supplier in the context of informal social-capital networks in the two largest emerging markets of China and India. The two main objectives of the study included an examination of the influence of communication behavior and conflict resolution on the development of social-capital networks and a comparison of the influence of distinct dimensions of social-capital networks on a buyer’s commitment to a supplier.

Design/methodology/approach

Data was collected in China and India from random samples of buyers. The model was tested using structural equation modeling.

Findings

Findings revealed that communication and conflict resolution contribute significantly to build trust, increase social benefits and promote mutual collaboration between buyers and suppliers in both China and India. However, social benefits were found to have a greater influence on commitment in India, whereas collaboration was found to have a greater influence on commitment in China.

Practical implications

The study demonstrates the importance of social capital theory to explain the informal social capital network and commitment development. Results provide practitioners with specific strategies to build social capital in China and India and improve committed relationships with buyers.

Originality/value

This study advances theory development within the context of emerging markets. It is unique as it includes the two most populous and fast-growing emerging markets in one study.

Citation

Graça, S.S. and Kharé, V.P. (2020), "Building social-capital networks and relationship commitment in China and India", European Business Review, Vol. 32 No. 5, pp. 823-843. https://doi.org/10.1108/EBR-09-2019-0219