Memories of Colonial Law: The Inheritance of Human Capital and the Location of Joint Ventures in Early-Reform China

Cheryl Long, Peter Murrell, and Li Yang, China Economic Review (forthcoming), .

Abstract:

We explore those mechanisms of historical persistence resulting from China's unique colonial experience. We provide evidence that foreign investors favored locating FDI in Chinese cities in which their home country had a colony in the 19th century. The results suggest that legal human capital inherited from colonial times affected economic decisions after 1978.  Thus, we attempt to advance the literature on history's long-lasting influence by proposing one particular mechanism of persistence—memory of legal institutions, or inheritance of legal human capital.

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