This dissertation, "Social Relations of Foreign Firms in China: a Focus on Trust, Network Ties and Social Capital" by Juan, Julie, Li, 李娟, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: Abstract of this thesis entitled "Social Relations of Foreign Firms in China: A Focus on Trust, Network Ties and Social Capital" Submitted by Julie Juan Li for the Degree of Doctor of Philosophy at the University of Hong Kong in June 2006 Business relationships often have a strong non-economic element. Social relations have been recognized as a central mechanism in the co-ordination of both intra-and inter-firm activities. For foreign firms who are operating in unfamiliar environment, social relations are particularly crucial for their growth and survival. Despite its significance, our understanding of social relations in foreign firm is rather uninformed. For example, how can foreign firms actively build trust? How do foreign firms form managerial networks with local partners? Furthermore, how do foreign firms leverage the social capital inherent in networks to facilitate organizational activities such as knowledge acquisition? This thesis aims to shed some light on these intriguing questions. The first study examines the roles of three strategies-localization, communication, and control-and their combinations in trust building. On the basis of a survey of 138 international ijoint ventures operating in China, we find that localization, communication, and control are important drivers of the development of local senior managers' trust in overseas headquarters. Furthermore, the joint use of localization and communication represents a potent strategic combination for trust building. However, a localization strategy coupled with intense control hinders trust development. The second study investigates how firms' strategic orientations influence the formation of two types of managerial networks, as well as the impact of managerial networking on firm performance. Analysis of survey data from 181 foreign-invested enterprises in China supports that a market orientation fosters both types of network building. Technology-oriented firms are more likely to cultivate managerial ties with top managers at other firms but less likely to establish networks with government officials. In contrast, entrepreneurial firms tend to develop vertical networks with government officials but have no intention to deepen their horizontal networks with other firms. Competitive intensity moderates the relationships between strategic orientations and managerial ties. Finally, managerial networking has a positive impact on FIE performance. The third study examines the influence of social capital and contracts on the acquisition of two types of knowledge. Using survey data from 168 foreign subsidiaries operating in China, we find that the cognitive dimension positively affects both types of knowledge acquisition. The relational dimension has a stronger impact on tacit knowledge acquisition than explicit knowledge acquisition. However, the structural dimension of social capital only influences the acquisition of explicit knowledge. Furthermore, legal contracts only help acquire explicit iiknowledge, but the joint use of contracts and social capital has a productive effect on both tacit and explicit knowledge acquisition. In addition, the positive effects of social capital on tacit knowledge are constrained by greater cultural distance. Overall, our studies provide important implications for f