Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240911 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
GLO Discussion Paper No. 932
Publisher: 
Global Labor Organization (GLO), Essen
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.
Subjects: 
Soviet Aid
Technology Transfers
Incentive Pay
Innovation
China
JEL: 
O10
O30
L20
M52
Document Type: 
Working Paper

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