The double-edged sword of ethnic similarity

In this chapter, we focus on how ethnic identity affects interactions between expatriates and local employees when they share an ethnicity. A large number of overseas Chinese are working in China; yet how they view their shared ethnicity might be different from how local employees view it. Such divergent perspectives are one cause of the challenges ethnic Chinese expatriates face when interacting with local employees. We propose the concept of ethnic identity confirmation, defined as the level of agreement between how one party views the importance of his/her ethnic identity and how his/her ethnic identity is viewed by other people, as a key factor in expatriate-local employee interactions. We provide detailed analyses of how expatriates might perceive their own ethnic identity and why their view might diverge from that of local employees. Three studies were conducted to test the role of ethnic identity confirmation. Study 1 (N = 256) reveals that ethnic identity confirmation matters more among ethnically similar expatriates and local employees than among ethnically different pairs and that this also affects knowledge transfer between them. Study 2 (N = 154) and study 3 (N = 292) investigate local employees’ ethnic identity confirmation and reveal that local employees tend to share more information with ethnically similar expatriates who confirm their views of their own ethnic identity. Finally, we discuss the implications of our findings for expatriates and MNCs.