同乡网络如何促进资本跨地区流动？

Although market-oriented reforms have reduced institutional barriers to factor mobility, regional market segmentation continues to constrain the efficient allocation of capital across regions. Population mobility provides an important perspective for understanding capital allocation. Existing studies mainly emphasize how population mobility affects capital flows through changes in labor supply and local market conditions. However, it also facilitates the formation of geographically-based social ties that connect regions. Hometown networks provide channels for information exchange, trust building, and resource sharing, potentially reducing information constraints and intergroup trust deficits faced by investors entering unfamiliar markets.

Using the 2010 National 1% Population Sample Survey and business registration records, this paper constructs county-pair measures of hometown networks and firms’ cross-regional investment to examine how hometown networks affect capital allocation across regions. The results show that hometown networks significantly increase cross-regional investment. Exploiting the household registration reform as a shock that relaxed migration constraints, this paper finds that the investment-promoting effect of hometown networks becomes stronger after migration barriers are reduced. Mechanism testing indicates that hometown networks facilitate investment by improving access to destination-market information and strengthening intergroup trust. Consistent with these mechanisms, the effects are stronger in industries with greater market frictions, among migrants with higher human capital, longer migration experience, and social-migration motives, and in investment flows from more developed to less developed regions.

This paper makes the following contributions: First, it extends research on factor-market integration by identifying a social-network channel through which population migration affects capital allocation. Second, it extends the literature on hometown networks from migration and trade linkages to capital allocation, enriching research on how social networks shape regional economic connections. Third, it uncovers how hometown networks alleviate information frictions and intergroup trust deficits in cross-regional investment, deepening our understanding of how informal institutions facilitate capital flows across regions.