Page - (000079) - in Knowledge and Networks

70 Indonesia—brings about severe corruption and thwarts efficient investment (Kang, 2003). At the firm level, family ties discourage the participation of nonfamily professionals in family firms and restrict the growth of those enterprises (Cai, Li, Park, & Zhou, 2013; Weidenbaum & Hughes, 1996). Although contradictory, the preceding arguments generally focus on the relation- ship between family structure and market development in that family ties affect resource allocation and labor participation. The presumption in those negative understandings of family ties is that individuals would make right and rational choices without family bonds and that market economies would therefore develop efficiently. In the positive evaluation of family values, family considerations force labor into the production process of capitalism and contribute to capital accumula- tion. In general, these arguments contextualize family ties in the neoclassical frame- work of economic development and have not directed much attention to the role of family structure in knowledge-sharing and learning. From a historical perspective, these arguments make sense because family economies often emerge in the early stages of capitalism and are regarded as irrelevant to the knowledge economy. However, this view of family ties can be questioned. Because acquisition of techni- cal and business know-how is always crucial in economic development processes even in their early periods (Mokyr, 2004), it becomes important to discuss whether family networks can promote knowledge-sharing and creation. Empirical investigation of this question in the context of regional economies has led to contradictory findings. In an exploration of high-tech industries in the Research Triangle region of North Carolina (near Durham, Raleigh, and Chapel Hill), Renzulli, Aldrich, and Moody (2000) suggested that family ties can aid the diffusion of homogeneous information but are of little help to technological entre- preneurship. By contrast, research on start-ups in traditional industries in develop- ing economies shows that entrepreneurs’ family networks convey industrial information and professional advice, which are crucial for the establishment of small businesses (Anderson, Jack, & Drakopoulou-Dodd, 2005; Jack, 2005). Indeed, some research on industrial clusters in developing contexts shows that fam- ily and kinship networks can act as important learning channels for local entrepre- neurs and firms. In a cluster producing surgical instruments in Pakistan, extended family ties were found to stimulate technical knowledge-sharing between firms and encourage interfirm cooperation in local business communities (Nadvi, 1999). Li et al. (2012) also documented how family- based learning has transformed some rural villages in South China into a large cluster of aluminum-processing activities over the past 20 years. Munshi (2011) and Henn (2012) further showed that kinship and ethnic networks in an Indian diamond cluster not only functioned as a localized channel of learning but also acted as a transnational knowledge bridge connecting local communities with global diamond centers in Europe and America. As noteworthy as these empirical studies on family ties in regional contexts can be, they do not yield a coherent framework for explaining why family ties can chan- nel learning in some settings but not in others. There is also little theoretical knowl- edge about the structure of family networks and how knowledge can diffuse within them. P. Li