{"title":"Surname distance and interregional investments","authors":"Weijie Jiang, Hui Yu, Qi Chen","doi":"10.1016/j.econmod.2024.106858","DOIUrl":null,"url":null,"abstract":"<div><p>Interregional capital mobility is crucial for high-quality development. Existing literature highlights the role of geographical and boundary effects on interregional investment, but often overlooks cultural differences. Using administrative records of business registration data covering nearly 200 million firms in mainland China from 2005 to 2022, we construct a novel panel data on interregional investment networks and reveal that surname distance as a metric of cultural differences significantly inhibits interregional investment, with elasticities of −0.955 and −0.713 on the amount and quantity, respectively. Furthermore, the mechanism analysis demonstrates that increased surname distance heightens survival risks, shortens market duration, and leads to more litigation for firms investing in culturally distant regions. This impact intensifies over time, is more significant in regions with low marketization levels, and has a pronounced effect on intraprovincial investments.</p></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"140 ","pages":"Article 106858"},"PeriodicalIF":4.2000,"publicationDate":"2024-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economic Modelling","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0264999324002153","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Interregional capital mobility is crucial for high-quality development. Existing literature highlights the role of geographical and boundary effects on interregional investment, but often overlooks cultural differences. Using administrative records of business registration data covering nearly 200 million firms in mainland China from 2005 to 2022, we construct a novel panel data on interregional investment networks and reveal that surname distance as a metric of cultural differences significantly inhibits interregional investment, with elasticities of −0.955 and −0.713 on the amount and quantity, respectively. Furthermore, the mechanism analysis demonstrates that increased surname distance heightens survival risks, shortens market duration, and leads to more litigation for firms investing in culturally distant regions. This impact intensifies over time, is more significant in regions with low marketization levels, and has a pronounced effect on intraprovincial investments.
期刊介绍：
Economic Modelling fills a major gap in the economics literature, providing a single source of both theoretical and applied papers on economic modelling. The journal prime objective is to provide an international review of the state-of-the-art in economic modelling. Economic Modelling publishes the complete versions of many large-scale models of industrially advanced economies which have been developed for policy analysis. Examples are the Bank of England Model and the US Federal Reserve Board Model which had hitherto been unpublished. As individual models are revised and updated, the journal publishes subsequent papers dealing with these revisions, so keeping its readers as up to date as possible.
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