Clan culture and supply chain resilience in China

This paper examines the effect of clan culture on supply chain resilience in China. We provide evidence that firms in cities with stronger clans experience fewer supply chain disruptions. The patterns remain robust to alternative measures, various subsamples, and instrumental variable estimations. When natural disasters, tariff shocks, and unfavorable credit policies negatively impact the stability of supply chains, our results show that clans significantly enhance resilience to these shocks. Mechanism tests suggest that clans serve as a substitute for contractual institutions and particularly, stabilize the relationships with socially connected suppliers.