Long-term impacts of trade liberalization: Treaty ports and firm export in China

Abstract

We examine the long-term effects of historical trade liberalization on contemporary firm export performance. Between 1842 and 1943, China opened 43 treaty ports under Western pressure, exposing these regions to foreign trade while leaving others closed. Not until the 1980s did China liberalize global trade. Using firm-level data from 1998 to 2007, we find that firms located in prefectures with historical treaty ports in the 19 th century continue to outperform others in export scale and scope today. This persistence suggests that the legacy of 19th-and early 20th-century liberalization endured despite China's economic reforms since the early 1980s. We attribute these long-term effects partly to treaty ports' enduring influence on firms' foreign networks and risk-taking behavior.

Keywords: trade liberalization, history, ports, export, China JEL Classifications: F13, F15, N75, N95