Institutional Fields and Business Opportunities: The Role of Social Networks in Cross-border Life Insurance Transactions in Hong Kong

Cross-border economic transactions between Hong Kong and Mainland China have become more prevalent since the Mainland and Hong Kong Closer Economic Partnership Arrangement was released in 2003. With a particular focus on Hong Kong’s life insurance industry, this paper adopted social networks approach to explaining the selling strategies of life insurance agents with the Mainland Chinese background in conducting cross-border transactions. The study addresses three issues, including (1) How overseas life insurance policies are promoted to potential clients in Mainland China, (2) how trust is established in business relationships that span across borders, and (3) how physical, legal, and political barriers between Hong Kong and Mainland China are overcome to facilitate cross-border life insurance transactions. Preliminary data based on three months' observation in the life insurance industry and eight in-depth interviews with life insurance agents show that life insurance agents mobilize existing social networks in Mainland China to disseminate product information and bulid connections with more potential buyers. Existing social ties act as brokers to connect buyers and sellers and facilitates the cultivation of trust between them. During this process, the agents actively emphasize the institutional differences in the two markets (Mainland China and Hong Kong) to demonstrate the stability and reliability of the products and the market where the products are sold so as to stimulate the potential clients’ purchase intent. Moreover, they consciously and proactively connect the disconnected social networks within and outside Hong Kong to create for themselves a position embedded with rich and differentiated information that will give them a strategic advantage and allow them to influence intended buyers' purchase decisions, to facilitate transactions. The findings suggest that institutional fields and structural holes simultaneously shape business advantages in cross-border markets; The empirical evidence also highlights the importance of interpersonal trust in global economic activities.