Kinship Networks and Rural Entrepreneurs in China’s Transnational Economy

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Max Weber once observed that the strong lineage system in rural China had impeded the development of entrepreneurial capitalism in China. This paper attempts to reevaluate the old Weber thesis by empirically testing the relationship between kinship networks and the bourgeoning rural industrialization during the reform era. Analysis of village-level data shows that lineage networks, measured by the share of households belonging to the largest surname group, have large positive effects on the count of private entrepreneurs and total workforce size of private enterprises in rural China. I interpret this finding from a neoinstitutionalist perspective and argue that lineage networks support rural entrepreneurs by enforcing informal norms regarding private property rights when formal rules were ambiguous during China’s market transition.

Author Bio

Yusheng Peng is an associate professor of sociology at CUNY Graduate Center and in the Business Program at Brooklyn College. He graduated from UCLA with a PhD in sociology and, before joining CUNY, was a tenured associate professor at the Chinese Universty of Hong Kong. He is interested in the institutional and organizational analysis of Chinese economy and society and has recently published "Chinese townships and villages as industrial corporations" (2001), "Kinship networks and entrepreneurs in China's transitional economy" (2004), both in American Journal of Sociology, and “Lineage networks, rural entrepreneurs, and Max Weber” (2005) in Research in the Sociology of Work, Vol. 15.