No. 92: War, Migration, and Innovation: The Prolonged Impact of Universities’ Forced Relocation

Abstract

We examine the long-term impact of the temporary relocation of higher education institutions during the Second Sino-Japanese War on corporate innovation and educational attainment in the destination area. We use historical data on the location of universities in 1930s China to examine whether a temporary influx of highly educated individuals into an area affects innovation and human capital accumulation in the long term. We show that the current economic outcomes of counties to which universities relocated are better than those of counties that did not host any relocated universities, even were no significant historical differences in the counties in the period before the outbreak of the war. In addition, we find evidence that firms in counties with relocated universities presently have higher patenting activity than firms in nearby counties that did not temporarily host a university. Further analyses reveal improved educational achievement and/or stronger preferences for education as a channel for the observed improved innovation outcomes.