9633121 Nee The way in which firms in the People's Republic of China conduct business has been fundamentally altered in the past two decades. Firms have gained increasing independence from central authority and, in the process, have begun to grow at unprecedented rates. Chinese firms are not, however, conducting business as isolated economic entities. Rather they are joining business groups and conducting business from within these interfirm networks. Researchers have documented the central role organizational environments play in determining firm behavior and outcomes, but no systematic effort has been made to document the impact interorganizational networks have on firm behavior and performance. The proposed research will provide an account of the structure of the emergent Chinese business groups and document their impact on the performance of member firms. In the process, this research will also inform more general theoretical discussions about the role interfirm networks play in structuring the behavior and performance of individual firms. The proposed research also has implications for mangers and policy makers both in China and abroad as China's firms continue to expand and play an increasingly important international role. This research will employ quantitative panel data, financial and network data on the 40 largest Chinese business groups and their 522 member firms, as well as qualitative case study data on six of the groups included in the broader data set. The dynamic, multi-level quantitative data will facilitate the use of the techniques of social network analysis to describe the structure of the groups and hierarchial regression analysis to test the effects the structure has on firm behavior and performance. The funding of this proposal will facilitate the collection of the second wave of the quantitative data (including all network data) as well as the case study data. ***
