This paper focuses on how and why Guanxi, a Chinese indigenous concept which influences every aspect of Chinese social life for thousands of years, affects the knowledge transfer at dyadic level. Based on a survey of 408 observations which collected from employees of six companies in China, the results indicate that Guanxi quality has a strong positive influence on the effectiveness of knowledge transfer, and that the effect is mediated by two unique dimensions of interpersonal trust (competence-based trust and benevolence-based trust). In addition, the findings also provide a strong support for the interaction effects between Guanxi quality, as well as competence-based trust, and tacitness of knowledge. I also discuss the implications of these findings for research on social network and knowledge transfer.
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