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

Cong Liu
2019 Journal of Economic History  
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
more » ... war simultaneously hindered machinery imports. Better access to finance also contributed to firm entry after the trade shock.
doi:10.1017/s0022050719000858 fatcat:qmyslw3cajck3llxhbbfrce7oe