Influence of Regional Culture on the Informal Economy:A Case Study of Nanning, China

The informal economy plays a vital role in developing regions, yet how cultural capital shapes its dynamics remains underexplored. This study investigates how Nanning’s regional culture—folk song traditions, festivals, and ethnic food practices—mediates informal economic resilience. On the basis of ethnographic fieldwork and interviews with informal vendors, this research combined a comparative analysis of Lijiang (tourism-driven) and Xi’an (temple fair-focused) cases to frame the institutional examination. The paper explores those cultural festivals (e.g., March 3rd) that naturally offer platforms for informal trading that enable entrepreneurs to circumvent regulatory impediments while accessing customers. Second, a night-market food culture, predicated on ethnic flavours, encourages decentralized microentrepreneurship. These practices lower entry thresholds for marginal groups and legitimize informal economies within culturally legitimized spaces, meshing livelihood strategies with heritage preservation. Nanning's case study prioritizes place-based cultural capital as a mediator between state policies and informal sectors, resisting rigid formal-informal dichotomies. Policymaking needs to leverage cultural resources to render policymaking more inclusive without undermining grassroots resilience. The study offers a cultural-institutional approach to reconsider informal economies in developing contexts.