Clan loyalty and COVID-19 diffusion: Evidence from China

This paper addresses the substantial role of clan loyalty in promoting COVID-19 diffusion in China. Using a city-date panel dataset of observations from 183 cities (prefecture-level and above) in the period of the special long holiday of Chinese New Year in 2020 (January 24-March 1), we find that regions with higher clan loyalty have more COVID-19 cases than regions with lower clan loyalty. A one standard deviation increase in clan loyalty is associated with an 8.1% increase in COVID-19 cases. We further document that clan loyalty drives COVID-19 cases by promoting mass gatherings, exploiting a staggered difference-in-differences (DID) regression based on city community-management policy shocks. Our paper provides novel evidence of one negative public health consequence of clan loyalty, namely, its aggravation of COVID-19 cases.