Clan culture and patterns of industrial specialization in China

Haichao Fan, Chang Li, Chang Xue and Miaojie Yu

Journal of Economic Behavior & Organization, 2023, vol. 207, issue C, 457-478

Abstract: The clan, an extant social organization formed 2000 years ago, bears a unique system of values still shaping fundamental institutions of modern society. In this research, we show how traditional clans affect the patterns of industrial specialization in China today. We find that industries dependent on relationship-specific investments tend to cluster in prefectures with strong clans. Our findings remain robust when considering alternative measures, including a set of historical and geographical correlates, and excluding cities in the southeast of China. Clans have a stronger effect on the specialization of the private sector than the state sector. In addition, the clan culture of immigrants matters for the industrial specialization of host regions. Our firm-level analysis further shows that the effects mainly originate from an overall improvement of the contracting environment by the clan culture.

Keywords: Clans; Industrial specialization; Informal contracting institutions (search for similar items in EconPapers)
JEL-codes: O10 R12 Z10 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:207:y:2023:i:c:p:457-478

DOI: 10.1016/j.jebo.2023.01.026

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