This study examines the role of personal connections, known as *guanxi*, in Chinese business environments, where formal legal support for private businesses is underdeveloped. The authors, Katherine R. Xin and Jone L. Pearce, use interview data from China to test the hypothesis that executives in private companies rely more on *guanxi* than those in state-owned or collective-hybrid companies. They find that private company executives consider business connections more important, depend more on connections for protection, have more government connections, give more unreciprocated gifts, and trust their connections more. The study also explores how *guanxi* is built and maintained, emphasizing the importance of gift-giving and social interactions. The results support the hypothesis that *guanxi* serves as a substitute for formal institutional support, particularly in the context of weak legal and regulatory frameworks. The study provides empirical evidence for the role of personal relationships in business, particularly in developing and transitional societies, and highlights the significance of gift-giving in building and maintaining these connections.This study examines the role of personal connections, known as *guanxi*, in Chinese business environments, where formal legal support for private businesses is underdeveloped. The authors, Katherine R. Xin and Jone L. Pearce, use interview data from China to test the hypothesis that executives in private companies rely more on *guanxi* than those in state-owned or collective-hybrid companies. They find that private company executives consider business connections more important, depend more on connections for protection, have more government connections, give more unreciprocated gifts, and trust their connections more. The study also explores how *guanxi* is built and maintained, emphasizing the importance of gift-giving and social interactions. The results support the hypothesis that *guanxi* serves as a substitute for formal institutional support, particularly in the context of weak legal and regulatory frameworks. The study provides empirical evidence for the role of personal relationships in business, particularly in developing and transitional societies, and highlights the significance of gift-giving in building and maintaining these connections.