Selective Technology Importation and theConvergence in the Late Qing Dynasty:Evidence from Wired Telegraph

Jiao Yinyi1, Cai Meng*2

1 Center for Economic Research, Shandong University, Jinan, China

2 School of History and Culture, Shandong Normal University, Jinan, China

Abstract: Using the adoption and expansion of wired telegraph in China during the late19th century, this paper investigates the effect of cost reductions for knowledge exchange onChina’s industrial growth before the outbreak of the War of Resistance Against JapaneseAggression (1931-1945), thus testing Baldwin’s theory of “the Great Convergence”in which developing countries are empowered by information and communicationtechnologies. Based on panel data of 1858-1937, we found that wired telegraph access hada significantly positive effect, as well as a long-term growth effect, on the entry of industrialenterprises. Our mechanism analysis indicates that wired telegraph access acceleratedearly-stage industrialization in localities by encouraging market integration, human capitalaccumulation, and auxiliary commercial organizations. Only a few countries firmly assertedtheir telegraph sovereignty and set up their own workforce educational system duringtelegraph adoption. This explains why the Great Convergence arising from technologyimportation only occurred in a small number of countries. Our findings contribute tounderstanding the source of China’s modern industrial progress, as well as why globalinequities remain.

Keywords: wired telegraph, entry of industrial enterprises, the Great Convergence,

JEL Classification Codes: F125.1

DOI: 10.19602/j.chinaeconomist.2024.09.07