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Financial development and money market integration in Qing China, 1800–1911

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  • Du, Shuaishuai
  • He, Shijun
  • Huang, Guitian
  • Kong, Dongmin

Abstract

This article contributes to a deeper understanding of how financial development impacts money market integration in traditional society. 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. Piaohao can also suppress the dispersion of the silver–copper exchange rate caused by extreme weather. Clustering the piaohao industry is a plausible channel.

Suggested Citation

  • Du, Shuaishuai & He, Shijun & Huang, Guitian & Kong, Dongmin, 2024. "Financial development and money market integration in Qing China, 1800–1911," Finance Research Letters, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:finlet:v:63:y:2024:i:c:s1544612324003775
    DOI: 10.1016/j.frl.2024.105347
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    References listed on IDEAS

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    More about this item

    Keywords

    Piaohao establishment; Silver–copper exchange rate; Financial expansion; Difference-in-differences;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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