Development as WindfallWorld War I and Economic Boom in China

• 作 者: Julan Du Yousha Liang Chang Xue
• 机 构: DepartmentofEconomics,TheChineseUniversityofHongKongSchoolofEconomics,ZhejiangUniversity
• 出 处: The 5th International Symposiumon on Quantitative History(第五
• 发表日期: 2017年7期
• 关键词: World War I Economic Boom Foreign Penetration

　　This paper studies whether and how the shock brought about by World War I lead to an economic boom in modern economy across China.Using a panel data covering 282 prefectures during 1901-1927 and exploiting the variations in foreign powerspenetration,we find that regions more vulnerable to foreign powers,namely having more treaty ports or spatially closer to foreign enclaves,enjoyed higher growth of modern economy during the shock period following the break of World War I.Meanwhile,prefectures closer to European enclaves,instead of the Japanese ones,achieved better economic growth during the shock.The difference-in-difference estimation results show that these heterogeneous effects are largely due to the different trends of European penetration and Japanese penetration,namely a declining European penetration and a rising Japanese penetration during World War I.To further improve the identification,we employ the historical native custom dummy as the instrument and also find consistent results.The findings remain robust in various robustness checks.