The impacts of clan culture on private investment: Financing substitution and human capital accumulation

Abstract

The study uses the manually collected historical data and examines the relationship between the clan culture and private investment choice. It is found that the clan culture has a significantly positive impact on private investment of Chinese household, and enhancing their motivation to buy more risky financial products. After a series of tests including estimating selection bias and considering heterogeneity issue, the conclusions are still robust. Furthermore, the study also finds that this influence acts mainly through financing substitution and human capital accumulation. Overall, this research provides a new understanding of micro financial investment from the perspective of historical economics, thus replenishing the policy implications of informal system.