Interfirm relations in China: Group structure and firm performance in business groups

Journal Article (Journal Article)

The networks of interfirm relations that developed in business groups during China's economic transition have been an important part of the country's economic transition. This article examines the process by which interfirm lending and trade ties emerged and evolved in the business groups in the early stages of reform. It studies the effect of business group structure on firm financial performance in the early stages of reform (1988-1990) and later in development (1994-1999). Initially, firms resorted to external resources (e.g., prior connections) to develop alliances. With time, they began to draw on internal resources (e.g., experience) to identify partners. Some business group structures improve member firm performance early in reform, but group membership reduces performance as markets stabilize. The findings underscore the changing significance of interfirm alliances at various stages of economic development. The findings are relevant for both developing countries and countries that developed in previous eras. © 2009 SAGE Publications.

Full Text

Duke Authors

Cited Authors

  • Keister, LA

Published Date

  • August 1, 2009

Published In

Volume / Issue

  • 52 / 12

Start / End Page

  • 1709 - 1730

Electronic International Standard Serial Number (EISSN)

  • 1552-3381

International Standard Serial Number (ISSN)

  • 0002-7642

Digital Object Identifier (DOI)

  • 10.1177/0002764209331534

Citation Source

  • Scopus