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A study on the role of guanxi in entrepreneurship and employment

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  • Chen, Yao-Tung

Abstract

This paper examines the role of guanxi in influencing the decision of an individual to be an entrepreneur facing a risky technology or to become a worker facing an unemployment rate. Individuals are assumed to vary in terms of the strength of their established guanxi that could be utilized either to lower the set-up cost as entrepreneurs or to secure jobs as workers. Compared with the case where guanxi can only be used to reduce the individual's set-up cost to become an entrepreneur, it is shown that if guanxi can also help a worker find a job, then whether the employment rate might be improved or worsened will depend on the absolute risk aversion that is increasing or decreasing in income.

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  • Chen, Yao-Tung, 2011. "A study on the role of guanxi in entrepreneurship and employment," Economic Modelling, Elsevier, vol. 28(4), pages 2049-2053, July.
    • Handle: RePEc:eee:ecmode:v:28:y:2011:i:4:p:2049-2053
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    References listed on IDEAS

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    Cited by:

    1. Duan, Tinghua & Hou, Wenxuan & Rees, William, 2020. "CEO international experience and foreign IPOs," Economic Modelling, Elsevier, vol. 87(C), pages 461-470.
    2. Chenyang Zhang & Jianjun Jin & Xin Qiu & Lin Li & Rui He, 2022. "Regional Social Relationships Evaluation Using the AHP and Entropy Weight Method: A Case Study of the Qinghai–Tibet Plateau, China," Sustainability, MDPI, vol. 14(9), pages 1-16, April.
    3. Huatao Peng & Geert Duysters & Bert Sadowski, 2016. "The changing role of guanxi in influencing the development of entrepreneurial companies: a case study of the emergence of pharmaceutical companies in China," International Entrepreneurship and Management Journal, Springer, vol. 12(1), pages 215-258, March.
    4. Hong Yang & Brian Paul Cozzarin & Can Peng & Chun Xu, 2022. "Start‐ups and entrepreneurial teams," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1167-1184, July.

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    Guanxi Entrepreneurship Employment;

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