 Hi everyone. First of all, I would like to thank Mohammed and Victor for organizing an amazing conference and for including our paper in the program. I think it's very important to talk about big data in economic history and it's great that we have two days in order to do that. So thank you so much. I know that organizing online conferences requires even more work than in person conferences. So great job guys. So today I'm presenting my work on technology transfer in early industrial development which is a joint work with Boli and the motivation of this research is that technology transfer is a key driver for economic development that has been in technology transfer intervention have been widely used to push industrialization in developing countries. Moreover, it has been argued that the foray in know-how diffusion is essential for the creation of industry specific knowledge that can in turn allow the establishment and expansion of specific industries. Despite the importance of technology transfer on economic development, little we know about its causal effect on industrialization mostly because of lack of long-term data that are able to follow firms and countries involving these policies over time and because of lack of variation in how these policies are delivered. So we think that there are two major open questions about the long run and the spillovers effect of technology transfer but also about disentangling the difference between the transfer of technology embedded in capital goods versus the transfer of foray in know-how. So to answer this question, we use evidence from a unique historical episode which is the Sino-Soviet alliance, an alliance between communist China and Soviet Union that lasted between 1950 and 1963. It involved a bunch of different intervention including a massive technology transfer program that aimed at the construction of the so-called 156 projects. That goal was the construction of technology advanced large-scale capital intensive industry facilities and the projects sponsored through this program could be of two types. The basic transfer that had the goal of duplicating all Soviet plans as well as transfer in state-of-the-art machinery and equipment from Soviet Union to China. And an advanced transfer that on top of the basic transfer also included the training of Chinese engineers and technicians and technical assistants. Through this program that amounted to 45% of Chinese GDP in 1949 the country was able to receive the best technology available in Soviet Union that in some specific industries like steel and iron was the best in the world. So we collected data and on the projects that were approved under the Sino-Soviet alliance we found out that the projects indeed were with the project were eventually approved and signed were 139 and we matched these projects with the performance of the plant built in them. We have yearly data for plants in the steel industry between 1949 and 2000 and from level data in 1985 between 1998 and 2013 in all the other industries. So in terms of identification what we exploit is that the each project and more in general the project completion faced some idiosyncratic delays after the start mostly due to the fact that the Soviet Union didn't have the capacity to provide machinery all the machinery ask to China as well as the personnel to provide technical assistance and at the end of the 50s the Sino-Soviet alliance went into turmoil and specifically in 1960 the technology transfer program was cancelled. What this meant? It meant that projects that experienced fewer delays were completed before the split with the Soviet technology and this will be our treated projects while projects that experienced more delay that weren't finished at the time of the split and so they ended up being completed by China only using domestic technology and we will refer to these projects as comparison projects and we will show that they were very similar in terms of the observable characteristics as well the characteristics of the industry and the geographical areas in which they were located. So in terms of the results what we find is that technology transfer at the large and persistent effect on the performance on treated plant we document an increase in both the output quantity and quality and an average productivity increase productivity difference of 23%. We find that also these firms adopted more technology especially when China started to gradually open up to trade and employ better human capital and in the long run in the late 90s these firms had also more product diversification and innovation and engage in export to a larger extent. We also find that the advanced technology transfers so receiving the Soviet machines and training for the high-skill technicians further boost the plant performance the effects were larger more lasting there was a larger technological upgrade due to the complementarities between human and physical capital. And finally we document what the effects were in terms of local industrial development and what we find is that the program generates substantial horizontal and vertical spillovers larger for companies that locate close to plants that receive the advanced transfer while in the long run the productivity gain seems to persist only for firms that became privately owned and there are economic related to treated plants so either work in the same sector or in upstream downstream sectors of treated plants and in order to explain these results we look at some county level variables and specifically we document that in counties in which the treated projects were located the overall competition was high between the late 90s and the early 2000s as well there was a higher level of human capital. So in terms of contribution to the literature I think that this work contributes to the literature about the technological adoption and now a know-how of diffusion within and across countries. One key advantage of our setting is that we can exploit as good as random variation in the projects that were eventually completed with technology transfer and we are able to compare them with projects that were still completed but without technology transfer. And moreover we are able to disentangle the effect of transferring physical capital with the higher technology with the effect of also transferring the know-how that is necessary to operate these machines. We also contribute to the literature about economic agglomeration and industrial cluster estimating the long run effect of the construction of large industrial facilities and to the literature in terms of economic history looking at the post-war war two technology transfer programs that were widely implemented both in the economies related to the United States for instance Europe and Japan and in the economies more related to Soviet Union for instance China, Eastern Europe and other Southeast Asian countries. So the rest of the talk we describe Soviet technology transfer the data that we collected were empirical strategy our main results the spillover effects and then some conclusions. So to get started with the Soviet technology transfer when China with the the People's Republic of China was founded in 1949 after 22 years of civil war its economy was largely promoter and so the Chinese official press hard in order to get a technology transfer from the Soviet Union this technology transfer that was part of a broader form of assistance between the Soviet Union and China involved the signature of several agreements between 1950 and 1957 for the construction of the so-called 166 projects whose goal was building technologically advanced large-scale capital intensive industrial facilities this program was massive it accounted for 45 percent of Chinese GDP in 1949 and 144 percent of Chinese industrial production in 1949. The projects that the Soviet Union sponsors were sponsored were of two types the first one were basic technology transfer that involved the duplication of all Soviet plants the installation of state-of-the-art machinery and equipment through which China had received the best technology used in the Soviet Union in iron and steel some state-of-the-art machinery were installing Chinese plants even before being used in Soviet Union but there was also help in selecting plant sites applying the design and supervising construction of of the plants while other projects received the advanced technology transfer so on top of the basic technology transfer there was also training of Chinese personnel specifically engineers and high-skilled technicians and the sharing of engineer design product design and other technical data. Despite the two countries where a picture of rosy friendship on the ground the technology transfer program encountered many problems as most of the machinery equipment and design arrived to Chinese plants or start operation later than planned there were many examples that can explain the reasons of these delays some were related to constraints on the Soviet production capacity in the sense that machinery and equipment were in reserve where we're not available in reserve in Soviet Union and so for instance if some unexpected event in Soviet factories opened then there were some delays or even the block of some shipment to China because these machines were really needed in Soviet Union. Moreover the ability of human capital like Soviet experts and also translators that could visit Chinese plants was very limited again we have found some examples of teams supposed to go to China that were directed to some Soviet plants due to sudden breakdown that no one else could deal with and also some cases in which the travel of the team to China was delayed because the translator didn't make significant progress in learning Chinese and so they couldn't help with the translation as much as it was needed. Some other problems depends on miscommunication between Soviet and Chinese experts there were some initial misunderstanding, long-term communication apparently didn't work well, there were some lost correspondence and so for instance some Soviet design didn't fit the characteristics of the land in which the some plants had to be built up. Of course China was aware of these problems but it was very hard to relocate these limited resources towards the more promising projects machinery and equipment were plant-specific also expert and translators were really trying to use specific machineries and so at the end there was not that much that China could do in order to deal with these delays. In the same time for political and ideological reasons the Sino-Soviet alliance went in turmoil although the diplomatic relationship between the two countries formally continued until 1963 in 1960 the technology transfer program was cancelled the sense that the Soviet Union stopped providing machinery and equipment and which Joe is expert that were in China. What were the implications for the program? So 80 projects that experienced fewer delays were basically completed at the time of the split and so they maintained the Soviet designed machinery and equipment while 59 projects that have not been completed yet but for which the location and equipment was already being chosen were completed by China without any Soviet technical assistance so relying only on domestic technology. So in terms of the data we collected data on the projects that were approved under this program we're talking about 139 projects that we have collected from the the National Archives Administration of China and in order to perform our empirical analysis we matched this data with data of the steel industry that have annual reports with the performance of the 92 firms that were in operation between 1949 and 2000 in China. In 1985 and between 1998 and 2013 we can match our plans with all the plans that are included in the second industrial survey and in the China industrial enterprise database and we complement this data with province or county level data from the statistical yearbooks for the years in which they are available. So in terms of empirical strategy as I was saying what we are exploiting is the idiosyncratic delays in project completion that emerge after the start and that were largely unplanned due to which projects that experienced fewer delays were completed with the Soviet technology before the split and projects that experienced more delays were completed with domestic technology by China only without any support from the Soviet Union. So in terms of the empirical specification we are going to progress some firm performance output of firmai in sector as in county C at time t on a dummy for the the treatment that we define as being equal to one for for the plants that receive the Soviet technology we control for some initial project characteristics and industry county or fixed factor. In terms of the identification assumption what we need to argue is that the delays that projects experience we were talking about their characteristics or potential to be successful and even though if it may be counterintuitive at the first sight these delays really were not really expected and emerge after the projects started. So if we compare the characteristics of the treated in the comparison projects we can see that they are extremely similar in terms of many characteristics the number of firms supposed to receive an advanced transfer when these projects were approved when they were supposed to start how long they were supposed to last the number of workers so the investments involve the different measure of distance from the borders as proxy for accessibility of the project per se the major delay the major difference that we observe is in delays that it's less than three years for a treated project and more than five years for comparison projects. We also check whether the government may have decided to prioritize some specific industries that there may be more important for economic development but also in this case we don't find an association between belonging to a specific industry and the probability of receiving the treatment and we do the same exercise by looking at the location of projects at the province level and the smaller level of aggregation and they all confirm our results. As I was saying before a potential threat to our identification can come if the Chinese government was able to reallocate some machinery on personnel from treated to comparison projects however this is very unlikely to be happened so first of all we didn't find any evidence of capital good reallocation and we think that this is because it would have involved a have involved a significant slowdown in the completion and in the production of these projects that were the best projects that China had available. High-skilled workers were employed but only locally and as migration was highly restricted due to the UKU system the registration system we can also exclude that there was a large inflow of of workers between treated and comparison plants. We also propose an idea approach in which we instrument the delays experienced by the project sorry in which we instrument the probability of being treated with the delays that project experience but I'm not showing these results in the interest of time. So to get started with the first set of results we find that receiving the technology transfer has a positive effect for the outcomes of treated firms they increase the production of still by 24 percent they were 33 percent more productive and if we look at the persistence of the effect we can see that the effect on productivity for instance start being significant three years after the start of the program and the effects remain large and significant until the end of our samples of 50 years after this project actually started. We can also look at the composition of the steel produced and we find that there is an increase in the production of high quality steel that is declared steel and a decrease in the production of pig iron. There is also an increase of steel produced with the furnace open-air furnace and oxygen metal that were considered state of the art in the 50s and 60s but then later on in the 80s these metals became old-fashioned and were replaced by the continuous casting and we can see that after 1985 indeed the treated the plants adopted more advanced technology and this was also recognized by the fact that they were exporting more steel that is above the international standard 50 percent more so it's also an international recognition of the quality of these plants and finally we find that they increase the while the total number of workers is not different between treated and comparison plants they were employing more engineers and more skill technicians and consequently less low skill labor. The results between 1985 and in 1998 and 2013 for all the firms basically confirm our results treated firms have higher value added and their productivity and also they are able to produce at lower cost they have more product variety and systematically engage more in exports. We can also, given the feature of the program, disentangle the effect between the basic and the advanced technology transfer so what is the effect of just receiving technology advanced machines versus receiving technological advanced machines and training and know how needed to operate them and what we find is that receiving the advanced transfer had additional positive effect on firm performance there is 6 percent increase in productivity I find a 5 point sorry 6.9 percent sorry 3.9 percent increase in production additional to firms that receive the basic transfer 69 6.9 percent increase in productivity interestingly some plants thought that we're supposed to receive the advanced transfer but ended up receiving the basic transfer did not have better performance which is again an indication of how these delays were as good as random but also as the treatment is really driven the differences that we observe and we also find that these firms are mostly driven the results in terms of high quality labor employment with a substantial higher number of engineers and technicians than firms that receive the basic transfer the the major goal of the technology transfer program was to create large industrial facilities that could push economic development to local economic development in the remaining part of the paper we look at whether it was the case so first of all we look at whether there were any agglomeration effects so if firms either in the same industry or in upstream downstream industries of the treated and comparison plants were more likely to locate close to the to the latter and indeed we find that there is the case so there is a higher concentration of firms related to treated firms within 50 kilometers of them within additional gain for for being close to firms that receive the advanced transfer why we don't find anything going on beyond 50 kilometers or for firms in unrelated sectors and then we investigate whether the program created any horizontal vertical spillovers so in terms of horizontal spillovers the effects seems to be there but only for firms that receive the advanced transfer these firms are producing more and they are more productive than firms that are located either close to firms that receive the basic transfer or firms that didn't get any transfer while in terms of vertical spillovers we find that firms that are closer to treated plants are in general larger and i think these explained by the fact that treated plants are producing more and so they probably demand more from the supplier and they provide more inputs to their downstream firms so they produce more steel they employ more work or they use more inputs but they are not necessarily more productive while if these firms are located close to firms that receive an advanced transfer we also find effects on productivity in the sense that there is an additional increase in the production of steel that is associated with an additional increase in terms of productivity in the late 1990s China start a wave of privatization and the number of institutional changes that market transition towards more market oriented economy and so we wonder whether the technology transfer program interacted with these institutional changes that happen in the late 90s and specifically we look at whether firms that were close to treated plants were still able to maintain their economic advantage in light of this privatization and what we find is that firms that are close to treated plants are more productive or larger in size they export more only if they are close to a treated plant and become private between 1998 and 2013 which is the time period that our data covered with an additional gain for new firms for new entrants that enter the market as private firms between this time period and so we wonder whether the technology transfer created some local conditions that may have interacted with these important institutional changes and specifically we analyze two angles the first one is competition so as I was showing before there were agglomeration effect in the sense that there was higher number of firms that relate close to treated plants between their opening and 1985 this below risk effect persisted in 1998 and 2013 there was an average 20 more firms located close to treated plants and the higher fraction of these plants became private between 1998 and 2013 so at the county level we document and increase in the competition that probably forced private firms to compete more and to become more productive when they could do that we also look at what happened in terms of human capital and we find that in treating counties there is higher concentration of human capital in terms of college graduate and high-skilled workers and again we think this is an important factor for explaining our long-term results because when firms become private they start competing for inputs the registration system the uco system was still in place even though it was lifted gradually lifted but was still in place for most of this period so definitely having a higher level quality of human capital at the local level may have helped these firms in employing better workers with consequently better economic performance okay so I'm almost out of time so let me just conclude and then I look forward to discuss more with you what we show in this paper is what is the longer run effects of technology transfer we document that larger technology transfer program can have direct effect on the performance on treated plants that are highly persistent over time they and they can also create agglomeration effect and horizontal and vertical spillover effect and in the context of China that started important privatization campaign in the last 30 years we also find a substantial real location from state-owned to privately owned firms the last question could be what is the external validity and what are the policies implications that we can draw from this program so first of all technology transfer program were widely used in the 50s in the 60s to promote industrialization of developing countries I think that our work shows that technology transfer played an important role in the industrialization of these countries because the same results cannot be achieved by simply imitating foreign technology even when some plants imitate are available within the country and I think that our results also underscore the importance on foreign on the job training and know-how diffusion to create industry specific knowledge that can really allow these industries to flourish and the effects to persist in the long run through more technological adoption and innovation so I'll stop here and thank you very much for coming stop sharing so if there is any questions