The power of clans: How social capital sheltered firms during the COVID-19 pandemic

Data from 3,555 Chinese listed firms show that firms in cities with greater clan strength faced smaller losses and swifter recovery following COVID-19. Clans were significantly related to individual values facilitating pandemic prevention; these ties guaranteed economic activities and sheltered firms from the shock. Our results frame social capital as a complementarity to formal institutions during crises.& COPY; 2023 Elsevier B.V. All rights reserved.

Automated summary

Data from 3,555 Chinese listed firms indicate that cities with stronger clan influence experienced lesser losses and faster recovery post-COVID-19. Clans were significantly associated with individual values that facilitated pandemic prevention, ensuring economic activities and protecting firms from the shock. This study highlights the role of social capital as a complement to formal institutions during crises.