Networks in Cultural, Economic and Evolutionary Perspective

35 Pages Posted: 9 Mar 2004

See all articles by Barbara Krug

Barbara Krug

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

Date Written: January 2003 1,


Depending on the kind of literature networks in general, and Chinese networks in particular seem to be different phenomena, or are explained by different factors leaving the interested public puzzled. Whether Chinese networks resemble Clans, Clubs, or Mafia-kind of organizations is as much disputed as the effects of networking on the economy. While some argue that networks contribute to overall factor productivity in a situation in which neither the old planning system nor the nascent markets function, others insist on their counterproductive potential for the transformation of the Chinese economy. A third group dismisses networks as a transitory phenomena that will disappear with ongoing market reforms, in particular the wider use of the price mechanism for allocating resources and co-ordinating economic activities. The following attempts to shed some light into the confusing argumentation by grouping the different approaches according to what is explained, and the explaining items. The paper will systematically compare theories that are usually classified as taking a cultural, economic, and evolutionary perspective and which can be found in China-specific or social science literature. All these approaches claim to provide explanations for (Chinese) networks. Yet they differ with respect to the phenomena that they want to explain, namely networks and/or the explanatory factors they regard as crucial. Thus, for example cultural and economic, better: Transaction cost economics (TCE) approaches focus on networks as a given organizational form, while evolutionary economics or the capability approach in management science include a further dimension, namely time, subsequently regarding network as an activity that might lead to different network forms. The approaches differ also widely according to the factors singled out – or isolated -which are claimed to be the crucial items in any explanation for networks. As will be shown the two competing models in which networks are either based on co-ethnic groups or on expected functional value are not necessarily mutually exclusive.

Keywords: cross cultural studies, Chinese business behavior, networks, social capital

JEL Classification: M, M10, L2, O53

Suggested Citation

Krug, Barbara, Networks in Cultural, Economic and Evolutionary Perspective (January 2003 1,). ERIM Report Series Reference No. ERS-2003-050-ORG. Available at SSRN:

Barbara Krug (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam

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