Trust, Reciprocity, and Guanxi in China: An Experimental Investigation

Fei Song (), Charles Cadsby and Yunyun Bi ()
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Fei Song: Ted Rogers School of Management, Ryerson University
Yunyun Bi: Taiping Asset Management, Shanghai, China

No 1204, Working Papers from University of Guelph, Department of Economics and Finance

Abstract: We examine the influence of social distance on levels of trust and reciprocity in China. Social distance, reflected in the indigenous concept of guanxi, is of central importance to Chinese culture. In Study 1, some participants participated in two financially salient trust games to measure behavior, one with an anonymous classmate and the other with an anonymous, demographically identical nonclassmate. Other participants, drawn from the same population, completed hypothetical surveys to gauge both hypothetical behavior and expectations of others. Social distance effects on actual and hypothetical behavior were statistically consistent. The results together corroborated the hypothesized negative relationship between trust and social distance. However, reciprocity was not responsive to social distance. Study 2 found that affect-based trust, but not cognition-based trust, played a mediating role in the relationship between social distance and interpersonal trust in a hypothetical scenario. We conclude that close guanxi ties in China engender affect-based trust, which is extended to shouren classmates. This is true despite the fact that no more cognition-based trust is placed nor reciprocity received or expected from classmates compared to demographically identical shengren nonclassmates.

Keywords: Experiment; Affect-based Trust; China; Guanxi; Reciprocity; Trust; Social Distance (search for similar items in EconPapers)
JEL-codes: C91 D03 D69 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2012
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp, nep-gth, nep-net, nep-soc and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Published in Management and Organization Review (2012), Vol. 8, 2, 397-421.

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Journal Article: Trust, Reciprocity, and Guanxi in China: An Experimental Investigation (2012)
Journal Article: Trust, Reciprocity, and Guanxi in China: An Experimental Investigation (2012)
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