Seminar of economic and social research college (No. 37)
Culture and the Economy: Clan, Entrepreneurship, and Development of the Private Sector in China
Lecture| April 5, 2017/3:00-4:15 p.m. | 106B meeting room in Zhonghui building in Jinan University

Speaker: ZHANG Chuan-chuan
Sponsor: Economic and social research college of Jinan University.

ABOUT ZHANG CHUAN-CHUAN
Associate professor of economic college in Central University of Finance and Economics, he got his PhD in economics at National School of Development at Peking University in 2013. His academic interests are aging and social security, determinants of health and its influence, international trade and labor market, the development of city, cultural concepts and economic behavior.

Abstract: This paper examines the relationship between culture and the economy, investigating the role of clan in China's unprecedented development of the private sector. Although with no well-developed financial and legal systems, China witnesses a boom of private sector, which contributes to most of its economic growth during the past three decades. Using inter-census population survey and economic census data, I find that the clan culture is positively associated with the likelihood of entrepreneurship and the share of economy in the private sector. Exploring possible mechanisms, I find that the clan culture help privately owned enterprises to overcome financing constraints and escape from local government’s “grabbing hand”. In addition, the clan culture is significantly related to a set of individual values, which are arguably relevant for private business. Finally, I find that the role of clan culture reduces as formal institutions develop. The results overall demonstrate that the culture, as informal institution, substitutes for formal institutions and significantly influences the performance of an economy (JEL classifications: J21, O10, P20, R12, Z10).