By looking at the reactions of investors and governments to the publication of the Hurun Rich List, an annual ranking of the 1,000 richest individuals in China, Xianjie He, Oliver M Rui and Xiao Tusheng examine how culture affects economic behaviour. China adopted a socialist system in 1949 and the Chinese have since become used to egalitarian social norms. The researchers note the difference between the culture adopted in China and the West is that the latter focuses on individualism and the former on egalitarianism. As a result, ‘resentment against the rich’ is quite common in China. And the research suggests that when the Rich List is announced, investors and government react negatively to the companies controlled by the listed entrepreneurs and their market values drop significantly in the next three years.
Title: The price of being a billionaire in China: Evidence Based on Hurun Rich List
Source: Social Science Research Network