Business networks and the persistence of entrepreneurship: evidence from China

Abstract This paper investigates the long run association between business networks and entrepreneurship and regional development in China. We focus on chambers of commerce, bodies which facilitated networking between businesses until private firms were banned by Mao. Our results suggest that the pre-Mao chamber system is associated with long-lasting patterns of business creation and economic output in China, with this influence surviving until the post-1978 return of the market economy. The associations are strongest in the early reform period but weaken over time. We show evidence that historic chambers density is correlated with later social capital, despite major political change.