Although the role of Guanxi in the Chinese business to business (B2B) market as a form of relationship marketing has received increasing attention in recent years, few empirical studies have explicitly distinguished between Guanxi and relationship marketing. Westerners typically consider Guanxi as unethical, but foreign-invested enterprises (FIEs) may have some difficulty in fully practicing relationship marketing in China without considering the influence of Chinese culture. In this regard, this study is guided by the following research question: “In China, should foreign-invested enterprises (FIEs) adopt Guanxi instead of relationship marketing in the B2B market?” In this study, we first provide an overview of previous research on Guanxi, focusing on the fundamental differences between Guanxi and relationship marketing. We then provide an empirical analysis of the differential effects of Guanxi and relationship marketing on firm performance by investigating 295 FIEs in the Chinese B2B market. The results suggest that Guanxi and relationship marketing are not trade-off options in today’s Chinese market. Guanxi and relationship marketing have synergetic effects on firm performance, that is, they have differential effects based on the mode of market entry and the type of competitor. Guanxi is more likely to influence firm performance for collaboration based entry firms rather than entry without collaboration firms, whereas relationship marketing is more likely to influence firm performance when FIEs’ main competitors are foreign firms than when they are local firms.

• Xina Yuan(Xiamen University)
• Sang Yong Kim(Korea University)
• Tae Ho Song(Pusan National University)