Impact of Institutions on Social Network Formation : Communist Party Membership and Social Network Investment in China

Using the 2003 wave of China General Social Survey (2003CGSS), we study the influence of the communist party on individual’s social networks in urban China and, thereby, present a case of socio-political institutions being an important ingredient in social network formation. We present a stylized model of social network accumulation to motivate our estimation equation and contrast it with the previous literature. In our empirical analysis, we adopt a counterfactual framework and estimate the effect of communist party membership on social network investment as an average treatment effect. We find the treatment to be significant