The Revenue Effect Of Social Network

"guanxi" is a non-institutional factor, which is difficult to measure and essential for Chinese transformation economy, and academic fields takes more attention on it. Because social capital is important for Chinese market logic, it is a meaningful topic in the research of the gap between the rich and poor.Base on the former research results, we make use of social network resource and explore the relationship between social capital and economics, and try to figure out the reason of unfair income from a new angle. We take measure of favor and information in social network, using Heckman 2-step method and Quantile Regression, so that we can lower Endogeneity Problem.Our research found, in the period with imperfect market economy, that social network resources have positive impact on high income employees. It is 4 times higher income that they can obtain if they make use of both favor and information. On the contrary, those who only use information or favor will have lower income, though. Furthermore, the network resources have different impact on every level of income, so it can harm to the fair income allocation.As the market economy become mature, after 1994, the impact of network has faded up, and human resource begins playing a crucial role. One more schooling year will lead to higher wage, as much as to 10%.Besides, in private sector, employees’wage is mainly decided by human recourse, gender and hukou, no longer social capital. The impact of one more year of education on levels of wage is average about 8%.In contrast, the public ownership sector, the social network recourse will lead to unfair income allocation. For example, wage will increase 4 times due to use of both favor and information.Above all, in order to decrease the income gap, market economy and private company is essential, and human recourse will have fair influence on income allocation.