Exploiting the gradual establishment of universities in China from 1862 to 1911, I identified that the introduction of useful knowledge, especially the upper-tail knowledge, played an important role on the industrialization of China. Besides, contrary to the common view that the civil service exam (keju) is one of the roots of the underdevelopment of China, I find that the traditional elites recruited by the exam also have a positive effect on the industrialization after the establishment of universities. Evidence shows that traditional elites would adopt Western learning once useful knowledge was introduced. And the results also show that if there were no traditional elites, the effect of university establishment on industrialization would become insignificant. The findings su...[ Read more ]

Exploiting the gradual establishment of universities in China from 1862 to 1911, I identified that the introduction of useful knowledge, especially the upper-tail knowledge, played an important role on the industrialization of China. Besides, contrary to the common view that the civil service exam (keju) is one of the roots of the underdevelopment of China, I find that the traditional elites recruited by the exam also have a positive effect on the industrialization after the establishment of universities. Evidence shows that traditional elites would adopt Western learning once useful knowledge was introduced. And the results also show that if there were no traditional elites, the effect of university establishment on industrialization would become insignificant. The findings suggest that access to useful knowledge is important for China to develop a modern economy. But the stock of traditional elites is crucial for the diffusion of useful knowledge in China.

Keywords: Modern knowledge elites, traditional elites, industrialziation, adoption of Western learning, China.