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The Legacies of the Soviet Influence in the 1950s: China's 156 Major Industrial Projects

Zhangfeng Jin ()

No 932, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: This paper investigates whether and how China's adoption of Soviet-aided industrialization programs in the 1950s has affected its long-run innovation. Focusing on 156 major industrial projects aided by the Soviet Union, combined with an instrumental variable approach, I find that the adoption of these programs substantially discourages local firms to innovate in the long run. A causal mediation analysis of instrumental variable settings shows that the negative effect is entirely driven by local firms' lower intensity of incentive pay. This evidence suggests disadvantages of Soviet-aided industrialization programs for long-run innovation due to firms adopting incentive-incompatible management technology.

Keywords: Soviet Aid; Technology Transfers; Incentive Pay; Innovation; China (search for similar items in EconPapers)
JEL-codes: L20 M52 O10 O30 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-cis, nep-cna, nep-ene, nep-his, nep-isf, nep-lma and nep-ppm
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:glodps:932

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