Who collaborates with the Soviets? Financial distress and technology transfer during the Great Depression

Jerry Jiang and Jacob P. Weber

Explorations in Economic History, 2025, vol. 95, issue C

Abstract: We provide evidence that financial distress induces firms to sell their technology to foreign competitors. To do so, we construct a novel, spatial panel dataset by individually researching and locating U.S. firms who signed Technology Transfer Agreements (TTAs) with the Soviet Union during the 1920s and 1930s in various U.S. counties. By relating the number of TTAs signed in each county to the number of bank failures, we establish a significant, positive relationship between financial distress and the number of firms signing TTAs with the Soviet Union. Our findings suggest that banking panics may create opportunities for foreign countries to acquire affected firms’ technology.

Keywords: Banking panic; Technology assistance; Know-how diffusion; Industrialization; Industrial policy (search for similar items in EconPapers)
JEL-codes: G21 N6 O33 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:exehis:v:95:y:2025:i:c:s0014498324000639

DOI: 10.1016/j.eeh.2024.101637

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