The one-month confinement (or doing the month, DM) for post-partum women is a tradition that has been practiced for millennia in Chinese society. Tedious preparations and numerous procedures of DM incur high transaction costs when purchasing the service from the market. To assure the practice of DM without interruption, which might endanger the health of postpartum mothers and newborn babies, the service of DM has always taken place at home. As an economy becomes more industrialised and urbanised, the opportunity cost of practicing home-made DM increases as female labour participation rises and the nuclear family becomes popular. An opportunity window opens up for outsourcing DM services. To entice expectant mothers to ‘buy’ the DM service rather than to ‘make’ it for themselves, entrepreneurs need to make quality measurements simple and cheap, to eliminate or reduce identity risks, and to minimise the need for specific investments. The ongoing progress of globalisation offers various opportunities for entrepreneurs to exploit institutional differences, as can be witnessed in the recent prevalence of extending the DM practice to birthing trips to the USA in order to gain citizenship.
Keywords: entrepreneurship, transaction cost, Chinese postpartum care, asset specificity, birth tourism