Collaboration and opportunism as a duality within social capital: a regional ethnic Chinese case study

Abstract

Ethnic networks constitute a form of social capital and are central to the success of many ethnic Chinese entrepreneurs in Southeast Asia. The paper elucidates how such ethnic networks come to be formed and how they may create value through entrepreneurship. The findings suggest that ethnic networks can be an enabler of business cooperation but have problems stemming from an essentially dual nature that balances the benefits of such cooperation against tensions from self-interest, opportunism and covert dealings. These rarely described opportunistic characteristics are derived from the distinct historical background of ethnic Chinese business in Southeast Asia. The paper advances the existing concept of ethnic Chinese business networking by showing empirically, the workings of a case of the normally intricate phenomena. Three propositions for theory are also developed that highlight implications of the opportunism, and the rules of the game in which human capital is being used.

Keywords:

• Ethnic entrepreneurship
• ethnic networks
• human capital
• Southeast Asia

Notes

1. Many terms are used to refer to Chinese living outside of China. Huaqiao (overseas Chinese) is normally used with reference to the Chinese who have settled or been born abroad with status as a citizen in another nation but are still Chinese in essence. Huaren (ethnic Chinese) refers to the Chinese immigrants who have become naturalised citizens of their host countries (Lynn 2000) and their descendants, who are born locally and account for the majority of the ‘overseas Chinese’ population in Southeast Asia today (Suryadinata 1997). He also suggests that the term ‘ethnic Chinese’ more accurately reflects the actual situation of the Chinese population in Southeast Asia today.

2. Redding (1996) indicated that the ‘refugee’ mindset is a common heritage shared by overseas Chinese in Hong Kong, Singapore, Taiwan, Indonesia, Malaysia, Thailand and the Philippines, in the formation of their business strategies, although distinctive business cultures have been formed through their historical experiences. Most overseas Chinese or their forefathers left China as refugees, and the present generation feels oppressed in host countries in the ASEAN (with the exception of Singapore) despite being an economically successful minority, or threatened by PRC in Taiwan and Hong Kong.

3. The insecure mentality among ‘overseas Chinese’ has also been described as ‘the siege mentality,’ (Yoshihara 1988; Redding 1990) and ‘the refugee mentality’ (Kotkin 1993).

4. A considerable part of the media data is available only in the Indonesian language, but has been translated into English for purposes of this study by two colleagues of one of the authors, both having MBA degrees from Western universities, one from University of California, Berkley, USA, and the other from Melbourne Business School, Australia.

5. The authors would like to point out that the failures were unrelated to the 97/98 Asian Financial Crisis.

6. This characteristic is similar to the argument of Whitley (1992) which used the same word to describe the diversification of Chinese family businesses.