Understanding the double-level Influence of Guanxi on Construction Innovation in China: the Mediating Role of Interpersonal Knowledge Sharing and the Cross-level Moderating Role of Inter-organizational Relationships

Guanxi, a Chinese term that defines social networks of power and benefits, can be divided into inter-personal and inter-organizational relationships. Guanxi significantly influences construction innovation in China. Many studies have examined the relationship between guanxi and construction innovation at the project or organizational level. However, few of these studies explain how guanxi might affect an individual’s innovative behaviour from a double-level perspective. This paper builds on social capital theory and social exchange theory to examine guanxi’s role in motivating innovative behaviour in a China-specific construction context. It investigates the main effects of inter-personal relationships on innovative behaviour, the mediating effects of knowledge sharing, and the cross-level moderating effects of inter-organizational relationships. These elements were tested using a survey that received 178 responses from 35 different organizations. The results were analysed using Hierarchical Linear Modelling (HLM) and revealed that inter-personal relationships have positive influences on innovative behaviour, thus highlighting the partial mediating effects of knowledge sharing. In addition, the analyses showed that inter-organizational relationships augment inter-personal relationships and knowledge sharing on innovative behaviour by cross-level interaction. The research findings enhance an understanding of guanxi and innovative behaviour in China-specific construction project settings, as well as verifying the significance of guanxi in stimulating innovative behaviour.