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

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  • Liu, Cong

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.

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  • Liu, Cong, 2020. "The Effects of World War I on the Chinese Textile Industry: Was the World’s Trouble China’s Opportunity?," The Journal of Economic History, Cambridge University Press, vol. 80(1), pages 246-285, March.
    • Handle: RePEc:cup:jechis:v:80:y:2020:i:1:p:246-285_8
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    Cited by:

    1. Réka Juhász & Claudia Steinwender, 2023. "Industrial Policy and the Great Divergence," NBER Working Papers 31736, National Bureau of Economic Research, Inc.
    2. Roberto Bonfatti & Björn Brey, 2020. "Trade Disruption, Industrialisation, and the Setting Sun of British Colonial Rule in India," CESifo Working Paper Series 8461, CESifo.
    3. Dong, Baomin & Peng, Kaixiang & Sun, Jianguo, 2022. "Financing China’s cotton textile industry: 1890–1936," Journal of Asian Economics, Elsevier, vol. 79(C).
    4. Bo, Shiyu & Chen, Ting & Liu, Cong, 2022. "Trade shocks, industrial growth, and electrification in early 20th-century China," Journal of Comparative Economics, Elsevier, vol. 50(3), pages 732-749.
    5. Daojun Zhong & Tengfei Lyu, 2022. "Implementation of supply chain management practices and its effect on textile firm's performance at China: A mediation analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2515-2528, September.

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