Heritage of Hostility: How Anti-Missionary Violence and Industrial Capacity Shaped China’s Quid Pro Quo for Foreign Technology

Renliang Liu and Jian Xie
Additional contact information
Renliang Liu: Liaoning University
Jian Xie: Southern University of Science and Technology

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: Why do some regions fail to adopt the best available technologies? This paper examines how anti-foreign sentiment, proxied by the incidence of anti-missionary violence, and industrial capacity jointly shaped the gains from China's 1983 Quid Pro Quo policy (QPQ, trading market access for technology). Our difference-in-differences analysis shows that the QPQ policy substantially increased foreign technology adoption in cities with more developed early industrial capacity. A subsequent triple-differences specification shows that anti-missionary violence erased around three-quarters of these gains, with the most pronounced effects on critical equipment, licensing agreements, and in cities where officials led the conflicts. Disaggregated analysis with stringent fixed effects demonstrates that hostility toward specific source countries sharply cut technology in-flows from those countries. Mechanism analysis suggests that anti-missionary violence contributed to this erosion by deteriorating bilateral municipal ties and deterring the entry of foreign-invested firms. Firm-level matching indicates a 15.8% productivity premium for technology adopters, and a back-of-the-envelope calculation translates this into an average city-level productivity shortfall of 0.128% over 1983–1995 due to anti-foreign sentiment.

Keywords: Foreign Technology Adoption; Quid Pro Quo Policy; Anti-Foreign Sentiment; Industrial Capacity JEL Classification: F63; N45; N75; O14; O33 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-cna and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://warwick.ac.uk/fac/soc/economics/research/c ... tions/wp777.2025.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:777

Access Statistics for this paper

More papers in CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE) Contact information at EDIRC.
Bibliographic data for series maintained by Jane Snape ().