Title: Family Background, Government Policy, and Doing Business in China

Speaker: Assistant Professor Xiaohuan Lan, Fudan University

Time: April 14th, 2017 13:30–14:45

Venue: Conference Room 106B, Zhonghui Building (College of Economics, JNU)

Abstract:

This paper investigates how the political background of parents affect children’s involvement in business in China. We first evaluate the advantage of having cadre parents for becoming a business owner, using multiple waves of a nationally representative survey between 2005 and 2012. Then we document that the effect varies greatly with respect to government policies. Specifically, by exploiting variation in government spending across provinces and the Fiscal Stimulus Package in 2009, we find that the advantage of having cadre parents is significantly larger in regions where governments spend more on business-related activities. Further evidence from firm-level subsidies and subjective evaluation of factors that matter for career success also sheds light on the mechanism.