Research

This paper examines how historically rooted informal institutions shape the allocation of state-controlled resources. Using 2011–2020 land transaction records, firm registration data, and a nationwide genealogy dataset, we identify firms affiliated with Chinese clans, which are local kinship-based institutions, and spatially match their land purchases to those of nearby non-clan-affiliated firms. We find that firms affiliated with local clans obtain land price discounts of 1.8%-3.7%. We investigate whether these discounts reflect social network ties or clans’ role in local governance. Clan-affiliated preferential allocation is also associated with weaker local development outcomes.