Are entrepreneurial cultures stable over time? Historical evidence from China

Are entrepreneurial cultures stable over time? In this paper, we use historical measures of the outgrowth of entrepreneurial culture in China and test whether these correlate with entrepreneurial activities today. We employ provincial panel data from China documenting the regional distribution of entrepreneurial activities during the Ming Dynasty (1368-1644) and the Qing Dynasty (1644-1912) and private firm activities in post-reform China (1992-2012). Our study finds a significant association between the regional distribution of historical and current measures of entrepreneurship, supporting (1) the long-term stability of underlying regional cultural differences; and (2) the adaptability of entrepreneurial activities to changing institutional arrangements and relative payoff structures. These results are robust to numerous alternative explanations, including geography, agglomeration advantages, education, and technology. Our findings suggest that government efforts to encourage new business ventures-if they are to have more than short-term effects-will need to take into account local cultural norms.