Heritage of Hostility: How Anti-Missionary Violence and Industrial Capacity Shaped China’s Quid Pro Quo for Foreign Technology

Why do some regions fail to adopt the best available technologies? This paper examines how anti-foreign sentiment, proxied by the incidence of anti-missionary violence, and industrial capacity jointly shaped the gains from China's 1983 Quid Pro Quo policy (QPQ, trading market access for technology). Our difference-in-differences analysis shows that the QPQ policy substantially increased foreign technology adoption in cities with more developed early industrial capacity. A subsequent triple-differences specification shows that anti-missionary violence erased around three-quarters of these gains, with the most pronounced effects on critical equipment, licensing agreements, and in cities where officials led the conflicts. Disaggregated analysis with stringent fixed effects demonstrates that hostility toward specific source countries sharply cut technology in-flows from those countries. Mechanism analysis suggests that anti-missionary violence contributed to this erosion by deteriorating bilateral municipal ties and deterring the entry of foreign-invested firms. Firm-level matching indicates a 15.8% productivity premium for technology adopters, and a back-of-the-envelope calculation translates this into an average city-level productivity shortfall of 0.128% over 1983–1995 due to anti-foreign sentiment.