Accumulated social capital, institutional quality, and economic performance: Evidence from China

This paper provides evidence from China that historically accumulated social capital affects the current economic performance by improving contemporary institutional quality. Using historical data, we employ the Elites Studying Abroad rates of the years 1847–1949 for each Chinese province as a proxy for accumulated social capital. Our empirical investigation shows that historically accumulated social capital strongly and significantly affects the current economic performance because it can improve current social capital and institutional quality. This argument is strongly robust across multiple controls such as geography information, climates, natural resources, historical economic conditions, and economic policies.