Over the past millennium, China has relied on the Confucian clan to achieve interpersonal cooperation, focusing on kinship and neglecting the development of impersonal institutions needed for external finance. In this paper, we test the hypothesis that the Confucian clan and financial markets are competing substitutes. Using the large cross-regional variation in the adoption of modern banks, we find that regions with historically stronger Confucian clans established significantly fewer modern banks in the four decades following the founding of China's first modern bank in 1897. Our evidence also shows that the clan continues to limit China's financial development today.
- Ph.D., M. Phil., Hong Kong University of Science and Technology
- B.A., Ocean University of China
Chicheng Ma joined the University of Hong Kong in 2017. He graduated from the Social Science Division of the Hong Kong University of Science and Technology in 2011, and served successively as assistant and associate professor at the School of Economics, Shandong University.
Chicheng’s research areas are development economics, cultural economics, political economy, and economic history, specialising in the roles of culture, institutions, and human capital in shaping long-term economic and financial development. He won the Royal Economic Society Prize for the best paper published in the Economic Journal in 2020, the Research Output Prize of HKU Business School in 2021, and the Economic History Association’s Arthur H. Cole Prize for the best article in the Journal of Economic History in 2022. His works on Confucianism, pirates, Jesuits, clans, and informal finance were covered by various media such as Forbes, Financial Times, VoxChina, Broadstreet, and LSE Business Review.
Chicheng is the Principal Investigator of competitive research grants awarded by Hong Kong Research Grant Council (RGC) and National Natural Science Foundation of China (NSFC), and a Co-Principal Investigator of RGC’s Area of Excellence (AoE) project Quantitative History of China. He serves as Associate Editor of the Australian Economic History Review, Executive Committee Member of Hong Kong Economic Association, and Co-Director of the International Society for Quantitative History.
- Development Economics
- Economics of Culture
- Political Economy
- Economic History
- Financial History and Development
- “Classicism and Modern Growth: The Shadow of the Sages”,
Journal of Economic History, forthcoming.
- “The Legal Origins of Financial Development: Evidence from the Shanghai Concessions”
(with Ross Levine, Chen Lin, and Yuchen Xu), The Journal of Finance, forthcoming.
- “Banking on the Confucian Clan: Why China Developed Financial Markets So Late”
(with Zhiwu Chen and Andrew Sinclair), The Economic Journal, 2022, 132(644), 1378-1413.
- “Knowledge Diffusion and Intellectual Change: When Chinese Literati Met European Jesuits”,
Journal of Economic History, 2021, 81(4), 1052-1097.
- “The Telegraph and Modern Banking Development, 1881-1936”
(with Chen Lin, Yuchen Sun and Yuchen Xu), Journal of Financial Economics, 2021, 141(2), 730-749.
- “Long Live Keju! The Persistent Effects of China’s Civil Examination System”
(with Ting Chen and James Kung), The Economic Journal, 2020, 130(631), 2030-2064.
- “Friends with Benefits: How Political Connections Help to Sustain Private Enterprise Growth in China”
(with James Kung), Economica, 2018, 85(337), 41-74.
- “Can Cultural Norms Reduce Conflicts? Confucianism and Peasant Rebellions in Qing China”
(with James Kung), Journal of Development Economics, 2014, 111, 132-149.
- “Autarky and the Rise and Fall of Piracy in Ming China”
(with James Kung), The Journal of Economic History, 2014, 74(2), 509-534.
Since Max Weber, Confucianism has been widely viewed as being in opposition to capitalist or modern growth in historical China, especially in comparison with the rise of Western Europe after the Protestant Reformation. In pre-19th century China, the absence of industrialization or capitalism is partially attributed to the conservative nature of Confucian culture, particularly the emphasis on the ‘adjustment’ to the world and the depreciation of pursuing wealth, among others. And perhaps more importantly, the clan as a tangible organization of Confucianism restricted interpersonal cooperation to the family or lineage scope. Such ‘kinship-based morality’, in contrast to the ‘generalised morality’ enforced by market institutions in the West, paved the way for China’s divergent developmental path from the West. In a recent study, Zhiwu Chen, Andrew Sinclair and Chicheng Ma find another channel through which Confucianism inhibits capitalism: competition in financial markets.
The telegraph was introduced to China in the late 19th century, a time when China also saw the rise of modern banks. Based on this historical context, this paper documents the importance of information technology in banking development. We construct a data set on the distributions of telegraph stations and banks across 287 prefectures between 1881 and 1936. The results show that the telegraph significantly expanded banks’ branch networks in terms of both number and geographic scope. The effect of the telegraph remains robust when we instrument it using proximity to the early military telegraph trunk.
Past events can obviously have a profound effect on the future; but can these effects be measured and quantified? Two professors at the HKU Business School, Professor James Kung and Dr Chicheng Ma, and Dr Ting Chen of Hong Kong Baptist University, recently attempted to find out. They co-authored a paper on the impacts of China’s long-lived civil examination, the keju, on the modern-day society and economy of the country. They discovered that success in this ancient examination in particular locations led to a measurable effect on modern economic development in the same locations in the present day.
China's civil examination system (keju), an incredibly long-lived institution, has a persistent impact on human capital outcomes today. Using the variation in the density of jinshi—the highest qualification—across 278 Chinese prefectures in the Ming-Qing period (c. 1368–1905) to proxy for this effect, we find that a doubling of jinshi per 10,000 population leads to an 8.5% increase in years of schooling in 2010. The persistent effect of keju can be attributed to a multitude of channels including cultural transmission, educational infrastructure, social capital, and to a lesser extent political elites.