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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
neoinstutionalist
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.
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