Historical social capital and contemporary private investment choices

Chen Feng, Caiquan Bai and Yankun Kang

Journal of Corporate Finance, 2023, vol. 79, issue C

Abstract: This paper investigates the impact of historical commercial social capital on contemporary private investment choices. We use unique data on shanghui, which represented the most important institutionalization of commercial social capital in China's financial industry in the late Qing Dynasty, to find that the establishment of shanghui is associated with a significant increase in residents' private risky asset investment today. The impact originates mainly from (i) an increase in local available investment finance, (ii) individuals' higher financial knowledge and literacy, and (iii) individuals' higher trust level and risk-taking abilities in the financial market. From a historical perspective, this study partially explains the current private investment choices and household financial investment imbalance in China.

Keywords: Shanghui; Private investment choice; Social capital (search for similar items in EconPapers)
JEL-codes: D14 N25 N85 Z13 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:79:y:2023:i:c:s0929119923000147

DOI: 10.1016/j.jcorpfin.2023.102365

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