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Clan culture and patterns of industrial specialization in China

Author

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  • Fan, Haichao
  • Li, Chang
  • Xue, Chang
  • Yu, Miaojie

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.

Suggested Citation

  • Fan, Haichao & Li, Chang & Xue, Chang & Yu, Miaojie, 2023. "Clan culture and patterns of industrial specialization in China," Journal of Economic Behavior & Organization, Elsevier, vol. 207(C), pages 457-478.
    • Handle: RePEc:eee:jeborg:v:207:y:2023:i:c:p:457-478
    DOI: 10.1016/j.jebo.2023.01.026
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    More about this item

    Keywords

    Clans; Industrial specialization; Informal contracting institutions;
    All these keywords.

    JEL classification:

    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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