 Financing China’s cotton textile industry: 1890–1936Baomin Dong, Kaixiang Peng and Jianguo Sun Journal of Asian Economics, 2022, vol. 79, issue C Abstract: The cotton textile industry was the primary source of Britain’s industrial revolution and Japan’s economic takeoff. The Chinese domestic mechanized cotton textile industry experienced a boom during the interwar period and became the leading industry in the manufacturing sector, although it failed to gain domestic leadership against Japanese funded firms. There is a debate on the role of external finance on firm growth both in the contemporary context and historical cotton textile industry context. The literature offers several competing hypotheses on the relationship between capital and industry growth such as “modernization”, “oppression” and “efficiency” argument. Our empirical results using firm level data between return of capital and the size of the capital indicate a clear positive effect of external finance on firm growth. This supports the “modernization” hypothesis and suggests that the causes of the mediocre performance of the Chinese-owned spinners relative to Japanese mills may have been mismanagement, undercapitalization, lack of reinvestment incentives, and low labor productivity etc. Keywords: Cotton textiles; Finance; Industrialization (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:79:y:2022:i:c:s1049007822000136 DOI: 10.1016/j.asieco.2022.101453 Access Statistics for this article Journal of Asian Economics is currently edited by C. Wiemer More articles in Journal of Asian Economics from Elsevier |
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