Historical Imprints and Contemporary FDI Distribution in Chinese Cities

We examine how the early international business legacy left by the Treaty Port era (1842-1943) affects Chinese cities' capabilities to attract and channel contemporary foreign direct investment (FDI). We find that two early international business conditions, Treaty Ports policy and overseas Chinese community, established an enduring set of institutions that affect cities' subsequent capability to attract foreign investment resources. Furthermore, we examine how these early imprinting effects were altered in subsequent sensitive periods characterized by institutional disorder (the Cultural Revolution) and a return to a favorable investment environment (the Reform and Opening-up era). This paper contributes to imprinting research by showing how multiple sensitive periods can affect initial imprints and developing a model to illustrate imprinting dynamics including imprint persistence, deterioration and reactivation.