Essays on infrastructure, knowledge, and economic development

Abstract

This thesis consists of three essays on Infrastructure, knowledge, and economic growth. Chapter 1 presents the first quantitative evaluation of the overall impact and distributional effects of railroad access on industrial growth in historical China. Using newly digitized data on railroad expansion and distance to hypothetical railroad networks as instruments, we find that railroad access significantly increased the annual entry of local industrial firms from 1858 to 1936 and industrial output values in 1933. However, the effect is concentrated in counties within 10 km of the railroad lines and is less pronounced in those specializing in agricultural exports and with historical handicraft textile centers, suggesting that improved transportation may have encouraged deindustrialization in peripheral areas and promoted the regional concentration of production. Our analysis of mechanisms suggests that railroads facilitated industrialization mainly by expanding firms’ access to larger markets. Chapter 2 investigates the impact of railroad access on knowledge production and diffusion in early twentieth-century China, using newly collected data on the publication of over 200,000 book titles. We find that railroad access significantly increased the number of published titles and the similarity of book subjects across regions. Using the publication of Western literature as a natural experiment for knowledge diffusion, we find that prefectures closer to Shanghai—the largest port and typically the first point of entry for imported Western literature in China—were significantly more likely to publish such works. Mechanism analysis suggests that railroads promoted convergence in local industrial sectors and facilitated the expansion of publisher branches along rail lines. Chapter 3 investigates the impact of library establishment on the emergence of modern human capital in early twentieth-century China. From 1917 to 1930, more than 1,000 public libraries were built across China. Using panel data on modern middle schools in 1907 and 1930, we conduct a first-difference analysis and find that public libraries contributed to a higher number of school students in modern middle schools. In addition, counties with older libraries tended to have more students in the short run and engineers in the long run. Further analysis shows that the effect was primarily driven by the availability of books on science and technology.