Syndication through social embeddedness: A comparison of foreign, private and state-owned venture capital (VC) firms

Jar Der Luo, Ke Rong*, Kunhao Yang, Rong Guo, Ya Qi Zou

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

23 Citations (Scopus)


This paper explores the different syndication behavior in various types of Chinese venture capitals (VC), in particular it focuses on foreign, private-owned and state-owned VC firms and these firms’ behavior when faced with institutional uncertainties. Mixed methods data analysis was conducted using the Simuton database of 1,173 VC firms and snowball interviews were also conducted in the Chinese state-owned and private-owned VCs as well as foreign VCs. Findings indicate foreign VC investors are more willing to build much denser relationships than those of Chinese state-owned and private VC firms in order to overcome the uncertainty. This result provides additional evidence that adopting close relationships or a guanxi-based (informal social network) strategy does not only depend on cultural issues such as East Asian culture, but also on high institutional uncertainty. Furthermore, this paper develops four propositions on how VC firms establish syndication influenced by high institutional uncertainty. Finally, the conclusion and discussion sections put forward implications to VC companies about how informal social networks facilitate the internationalization process and growth in foreign markets.

Original languageEnglish
Pages (from-to)499-527
Number of pages29
JournalAsia Pacific Journal of Management
Issue number2
Publication statusPublished - 2019 Jun 15
Externally publishedYes


  • Guanxi (informal social network)
  • Liability of foreignness
  • Social embeddedness
  • State-owned
  • Syndication
  • Venture capital (VC)

ASJC Scopus subject areas

  • Business and International Management
  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management


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