Financial Development and Money Market Integration in Qing China, 1800-1911

15 Pages Posted: 21 Feb 2024

See all articles by shuaishuai du

shuaishuai du

affiliation not provided to SSRN

Shijun HE

affiliation not provided to SSRN

Guitian Huang

affiliation not provided to SSRN

Dongmin Kong

School of Economics, Huazhong University of Science and Technology

Abstract

This article contributes to a deeper understanding of how financial development impacts money market integration in traditional society. However, no systematic quantitative studies have been conducted because of difficulties in obtaining data. We construct a province-pair dataset of piaohao (Shanxi banks) and silver–copper exchange rates to analyze this problem. We find that the establishment of piaohao significantly promoted the convergence of silver–copper exchange rates between regions. The effect of piaohao is weaker for province pairs where transportation and information transmission are more costly. Attenuating the effects of extreme weather and clustering the piaohao industry are two plausible channels.

Keywords: Piaohao establishmentSilver-copper exchange rateFinancial expansionDifferences-in-differences

Suggested Citation

du, shuaishuai and HE, Shijun and Huang, Guitian and Kong, Dongmin, Financial Development and Money Market Integration in Qing China, 1800-1911. Available at SSRN: https://ssrn.com/abstract=4734036 or http://dx.doi.org/10.2139/ssrn.4734036

Shuaishuai Du

affiliation not provided to SSRN

Shijun HE (Contact Author)

affiliation not provided to SSRN ( email )

No Address Available

Guitian Huang

affiliation not provided to SSRN ( email )

No Address Available

Dongmin Kong

School of Economics, Huazhong University of Science and Technology ( email )

Bldg. of Econ. School, Louyu Rd. 1037#
HUST, Hongshan Dist.
Wuhan, Hubei 430074
China

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