讲座主题：“Was the World’s Trouble China’s Opportunity?” The Effects of WorldWar I on Chinese Textile Industry
内容摘要：Import substitution is a commonly adopted policy, yet the evidenceon its results is mixed. This paper uses unexpected trade disturbances due toWorld War I to study how a temporary reduction of imports influenced thedevelopment of Chinese cotton yarn industry. During the war, Chinese importquantity of cotton yarn decreased by half while the price doubled. Narrativeevidence suggests that the yarn firms took this opportunity to earn additionalprofits and increase investments, but aggregated studies show that the postwaryears experienced greater capital formation. I combine newly constructedinformation on cotton yarn firms, access to trade, and local characteristicsfrom multiple sources to construct a county-level panel dataset from 1907 to1925 and quantitatively examine the impact of this trade shock on firm entryand investments. The results find a significant and positive impact on thecotton yarn industry, while the effect decreased as counties located furtherfrom ports. In addition, I examine the heterogeneous effects associated withvarious local institutions, and find that assess to finance was essential forfirm entry. In other worlds, contemporary import substitution strategy bringspotential gains for domestic industrial development, but supportiveinstitutions are necessary for the benefits.