Clan Networks and Enterprise Innovation：Synergy and Balance of Prior Experience of Rural Entrepreneurs

Abstract

Over the past 40 years of reform and opening up, China’s sustained rapid economic growth is closely related to the effective solution of the three rural issues. Compared with cities, China’s rural areas have relatively low level of economic development, relatively closed information, narrow financing channels, weak infrastructure conditions, and a lack of human capital and professional knowledge. At the same time, the relatively stable population structure, genetic relationship and intergenerational inheritance make the rural areas have closer clan relations. In this situation, how rural entrepreneurs seek advantages and avoid disadvantages, and obtain resources needed for enterprise development is not only related to the quality of their innovation and entrepreneurship, but also of great significance to the revitalization of rural economy.Existing research has recognized the important role of clan networks and other social capital, but it has not explained clearly what factors in clan networks are the key factors affecting the innovation of rural enterprises, and it has not recognized the moderating effect and inter-regional differences of prior experience of rural entrepreneurs.This paper empirically tests the influence of clan networks on enterprise innovation based on the micro data of the survey on thousand villages”, including the coordination and balance of prior experience of entrepreneurs. This paper finds that clan intensity reflects the relationship and cognitive characteristics of social capital, and the supply of resource capital and normative capital can promote the innovation level of rural entrepreneurial enterprises. In regions with high level of economic development or strong clan culture, clan scale has a more significant negative impact on the enterprise innovation level. That is to say, clan scale reflects more network characteristics of social capital and inhibits enterprise innovation by excluding outsiders and restricting the flow of personnel and knowledge. At the same time, the competence view based on the social capital theory finds that the accumulation of prior experience can improve the knowledge, resource, cognitive level or personal ability of entrepreneurs, making rural entrepreneurs better play the positive role of clan strength in innovation and reduce the potential negative impact of the clan scale on innovation. That is to say, the prior experience of entrepreneurs plays a balance and synergy role between clan networks and enterprise innovation.This paper contributes to the following four aspects: Firstly, it enriches the existing literature’s understanding of the influencing factors of enterprise innovation, focuses on the unique social situation in China, and studies the internal mechanism of clan networks and enterprise innovation. Secondly, we divide clan networks into two levels: scale and intensity, to conduct a more comprehensive and detailed study, and find that the clan strength reflecting clan cohesion has a more positive impact on the level of enterprise innovation. Thirdly, we analyze how the prior experience of entrepreneurs moderates the impact of clan networks. Fourthly, we take 3311 Chinese rural entrepreneurs as samples to reveal the impact mechanism of regional clan networks on the enterprise innovation level in rural areas of China.