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The Effects of World War I on the Chinese Textile Industry: Was the World’s Trouble China’s Opportunity?

Published online by Cambridge University Press:  26 December 2019

Cong Liu
Cong Liu*
Affiliation:
Assistant Professor at the Institute for Economic and Social Research, Jinan University, No. 601 Huangpu Avenue West, Tianhe District, Guangzhou, Guangdong, China510632. E-mail: congliu19@outlook.com.
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Abstract

This paper uses an unexpected trade disruption due to World War I to study how a temporary reduction of imports affects the entry of industrial firms. I construct a new transportation network to capture counties’ exposure to this trade shock and compile panel data to examine the impact on China’s manufactured textile industry. I find that counties with greater prewar exposure to international trade experienced more firm entry after the war. The effect was delayed because the war simultaneously hindered machinery imports. Better access to finance also contributed to firm entry after the trade shock.

Type
Article
Information
The Journal of Economic History , Volume 80 , Issue 1 , March 2020 , pp. 246 - 285
Copyright
© The Economic History Association 2019

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Footnotes

I am indebted to Price Fishback for his invaluable guidance. I benefited from suggestions and comments from two anonymous referees and the editors, Ann Carlos and Bill Collins, as well as comments by Cihan Artunç, Shiyu Bo, Ting Chen, Yi Chen, Taylor Jaworski, Wolfgang Keller, James Kung, Ashley Langer, Nan Li, Peter Lindert, Debin Ma, James Markusen, Carol Shiue, Xin Wang, Mo Xiao, Yi Xu, and Se Yan, as well as conference and seminar participants at Arizona, BNU, Colorado–Boulder, CUFE, Jinan IESR, KDI, SUFE IBA, SWUFE, ShanghaiTech, the 4th AHEC, the 2015 Cliometrics Conference, the 2015 CES meetings, the 2nd BCCDS, the 2nd HED Workshop, the 3rd Quantitative Historical Symposium, and the 17th WEHC. I am grateful to Ting Chen for sharing the railroad data and Carl Kitchens for guiding the construction of the transportation network. I also thank my research assistants, Jiahong Cai, Yurong Li, Hang Luo, Aimin Wang, Jinlin Wei, Jing Yuan, and Yan Zhou, for their excellent work. This project was supported by the National Natural Science Foundation of China (No. 71803113), the Shanghai Pujiang Program (No. 18PJC042), and the Exploratory Travel and Data Grants by the EHA. All the remaining errors are my own.

References

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