Risk Aversion and Guanxi Activities: A Behavioral Analysis of CEOs in China

In China, the strategic use of personal relationships is pervasive in transactions with government authorities as well as in interfirm relations. Explanations as to when and why firms rely on guanxi emphasize a close link between organizational resources, environment, and corporate strategic choices. Our study shifts attention to the importance of CEO preferences, specifically risk aversion, and suggests an investment theory of strategic...