Chinese born-global firms in a megacity: a social capital perspective
Creators: name: Leonard, Gordon
Publisher: name: figshare
Year: 2024
Subjects: classificationCode: 350704
subject: Entrepreneurship
classificationCode: 350706
subject: International business

description: This research responds to the recent call in the entrepreneurship literature to address the shortcomings arising from the application of management theories developed in the “West” to “non-Western” contexts. The International Entrepreneurship (IE) literature itself strongly suggests social capital generation is important for born global firms’ survival and growth, though understanding of how this is conducted in non-Western contexts is weak. Drawing upon and extending the social capital and legitimacy literature, this study utilises survey and in-depth interview data to further contextual knowledge about how born global firms go about generating their social capital in a booming city in south-west China, Chengdu. Born global firms have not been widely studied beyond the more developed coastal areas of PR China and with economic growth shifting towards rapidly growing interior cities such as Chengdu, this research provides new avenues to understand how born global firms can establish themselves in such different environments.<br><br>This study specifically seeks to understand how do born Chengdu based global firms earn and maintain legitimacy to establish contact with high prestige networked individuals under different socio-cultural conditions. In doing so, this research furthers the understanding of born global firms’ social capital generating behaviour outside of the more studied developed regions of China or the West. These studies have not focussed on the role of legitimacy in social capital building, which is suggested to be more relevant in regions or cities which are experiencing very rapid periods of change and economic disruption. These changes require born global firms to regularly renew their legitimacy due to the rapid disruptive pace of change.<br><br>Using a sequential explanatory design, this research collected fifty-two valid responses from owner-managers of Chengdu based born global firms. To follow up on emergent findings, eight in-depth semi-structured interviews were conducted to provide rich data on the linkages between the two most relevant dimensions of social capital (relational and cognitive) and legitimacy (cognitive and socio-political).<br><br>The findings of this research revealed that not only were strong ties vital during born global firms’ early efforts at social capital building, but an interesting finding also revealed from the qualitative rich data was the subsequent role officials and high prestige occupation holders played as these firms sought to expand their networks. Officials often served as key sponsors who facilitated access to high prestige individuals and additional scarce resources, which would hitherto remain hidden.<br><br>A conceptual typology of four firm types has been proposed based on cross case analysis of findings to demonstrate the dynamic linkages between the levels of socio-political legitimacy achieved and connections to prestigious occupation holders. This typology can be used by practitioner or academic audiences to strategically plan or understand and develop purposive social capital building strategies for born global firms. Details of an illegitimate type are also provided, illustrating where born global firms survivability could be imperilled if such strategies are ignored or neglected. This research may also be of interest to policy makers or organisations tasked with supporting born global firms such as chambers of commerce, and innovation/enterprise zones.<br><br>It should be noted this research is limited in its overall generalisability but can be applied and tested in the context of other non-Western emerging economies.