Commercial Social Capital and Social Conflict: Historical Evidence From China

ABSTRACT Social stability is a crucial prerequisite for the prosperity and development of a country or region, and social conflict has long been a focal topic in academia. However, few studies examine the impact of commercial social capital on social conflict. This paper addresses this gap by investigating the influence of shanghui (chambers of commerce) in the late Qing Dynasty, a form of commercial social capital, on regional social conflict. Utilizing prefecture‐level panel data from 1902 to s and employing a DID approach, we empirically explore the impact of shanghui on regional social conflict during this period. The results show that the establishment of shanghui significantly increased the likelihood of regional social conflict, and this effect remains robust across a variety of robustness tests. As a form of commercial social capital, shanghui effectively promoted the formation of merchant networks, facilitating collective action among merchants to safeguard their interests. Further historical evidence suggests that the impact of shanghui on regional social conflict is primarily evident in three areas: (1) supporting social revolutions, particularly the Revolution of 1911; (2) resisting actions by foreign merchants and the Qing government that threatened their interests, exemplified by the Boycott of American Goods and the Railway Protection Movement; and (3) siding with merchants in labor disputes, thus leading to worker strikes.