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Unraveling the mechanisms of reputation and alliance formation: A study of venture capital syndication in China

Authors

  • Qian Gu,

    Corresponding author
    1. J. Mack Robinson College of Business, Georgia State University, Atlanta, Georgia, U.S.A.
    • Correspondence to: Qian Gu, Institute of International Business, J. Mack Robinson College of Business, Georgia State University, Suite 1443, 35 Broad Street, Atlanta, GA 30303, U.S.A. E-mail: qgu@gsu.edu

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  • Xiaohui Lu

    1. NUS Business School, National University of Singapore, Singapore
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Abstract

Extant research shows that resources are significant to a firm's choice of alliance formation. We focus on an important form of intangible resource—firm reputation—and examine how it affects a firm's propensity to form alliances. We propose an inverted U-shaped relationship between a firm's reputation and its likelihood of alliance formation, resulting from the opposing mechanisms of opportunity and need. We also examine how this relationship may vary across two contingencies: (1) foreign and domestic firms; and (2) different levels of institutional development. Empirical analyses of China's venture capital (VC) industry provide support for our hypotheses. Copyright © 2013 John Wiley & Sons, Ltd.

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