Economics Brown Bag seminar: Gunes Gokmen

Brown Bag with Gunes Gokmen

Title: Traditional Religion and Entrepreneurship: Evidence from China

Abstract: We study the role of traditional religion in the origins of private entrepreneurship in China by focusing on the historical and contemporary influence of a prominent Chinese wealth god, Wutong. We leverage the facts that (i) in traditional Chinese folklore the God of Wealth governs the distribution of wealth, and (ii) a policy reform in 1895 eased restrictions on private enterprise establishment in China. We construct a unique dataset on temples devoted to the Wealth God to capture a more ingrained culture of wealth worship. Combining an instrumental variable approach with a difference-in-differences framework, we find that the 1895 reform led to a greater number of new private enterprises in prefectures with a Wealth God culture. Moreover, the influence of the Wealth God shows strong persistence. Remarkably, the Wealth God culture still affects the contemporary incidence of registered new businesses, occupational choice favoring entrepreneurship, and attitudes towards income and wealth. This paper helps improve our understanding of the enduring impact of previously overlooked cultural and religious factors on entrepreneurship and regional disparities within China.

Sandwiches will be served.