Investing in guanxi: An analysis of interpersonal relation-specific investment (RSI) in China

This study contributes to a more comprehensive understanding of relation-specific investment (RSI) in interfirm exchanges by introducing a construct for interpersonal RSI. Drawing on economic sociology and qualitative findings, we examine interorganizational RSI and interpersonal RSI as distinct constructs and uncover their roles in relationship performance. In particular, our study focuses on the Chinese interfirm context, in which interpersonal RSI, based on the indigenous practice of guanxi (cultivating social connections), is known as guanxi investment. We adopt a qualitative approach to explore the elements of guanxi investment, and then develop a behavioral measurement scale as a tool for further research. We employ an empirical survey to test and affirm the validity of the scale. The results confirm that in addition to their respective effects, interorganizational and interpersonal RSIs exert an interactive effect on interfirm relationship performance. We offer managerial implications for firms that operate in China.     

The Impact of Relation-Specific Investments on Channel Performance: Focusing on Mediators

This study investigates the mediating mechanisms through which relation-specific investments (RSIs) can contribute to channel performance in China. We distinguish between property-based RSIs and knowledge-based RSIs and propose that these two types of RSIs rely on different governance mechanisms to impact channel performance. Specifically, although property-based RSIs prompt the drafting and utilization of formal contracts, they promote channel performance through relationship communication. In contrast, knowledge-based RSIs enhance relational trust and relationship communication, which can increase the profitability of the channel relationship. However, both types of RSIs can enhance channel performance directly. Our study shows that relationship communication plays an important role in strengthening the effects of governance mechanisms for both types of RSIs in China. In addition, relational governance mechanisms have greater effects than formal contracts on channel performance. These results enrich our understanding of RSIs in the emerging market.     

Determinants of the demand for education in Spain

The aim of this paper is to estimate an equation for household demand for both secondary and university education, using an estimation of the opportunity cost associated with the decision to invest in education. Limited dependent variable models are applied to the data provided by the Family Budget Survey 1991 for Spain. The results show that the social and economic status of the family has a comparatively greater impact on household expenditure on secondary education than on university education. The opportunity cost is also shown to be a decisive variable in the decision to invest in secondary education, although the results are less conclusive in the case of university education.