IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v63y2024ics1544612324003775.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612324003775
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.frl.2024.105347?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2011. "Robust Inference With Multiway Clustering," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 29(2), pages 238-249, April.
    2. Zhiwu Chen & Chicheng Ma & Andrew J Sinclair, 2022. "Banking on the Confucian Clan: Why China Developed Financial Markets so Late," The Economic Journal, Royal Economic Society, vol. 132(644), pages 1378-1413.
    3. Mari Ohnuki, 2007. "The Bank of Japan Network and Financial Market Integration: From the Establishment of the Bank of Japan to the Early 20th Century," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 25(1), pages 95-128, March.
    4. Ting Chen & James Kai-sing Kung & Chicheng Ma, 2020. "Long Live Keju! The Persistent Effects of China’s Civil Examination System," The Economic Journal, Royal Economic Society, vol. 130(631), pages 2030-2064.
    5. Nogues-Marco, Pilar & Herranz-Loncán, Alfonso & Aslanidis, Nektarios, 2019. "The Making of a National Currency: Spatial Transaction Costs and Money Market Integration in Spain (1825–1874)," The Journal of Economic History, Cambridge University Press, vol. 79(4), pages 1094-1128, December.
    6. Boerner, Lars & Volckart, Oliver, 2011. "The utility of a common coinage: Currency unions and the integration of money markets in late Medieval Central Europe," Explorations in Economic History, Elsevier, vol. 48(1), pages 53-65, January.
    7. Ma, Debin & Zhao, Liuyan, 2020. "A silver transformation: Chinese monetary integration in times of political disintegration, 1898–1933," LSE Research Online Documents on Economics 104056, London School of Economics and Political Science, LSE Library.
    8. Boerner, Lars & Volckart, Oliver, 2011. "The utility of a common coinage: Currency unions and the integration of money markets in late Medieval Central Europe," Explorations in Economic History, Elsevier, vol. 48(1), pages 53-65, January.
    9. Luigi Zingales, 2015. "Presidential Address: Does Finance Benefit Society?," Journal of Finance, American Finance Association, vol. 70(4), pages 1327-1363, August.
    10. Sussman, Nathan, 2022. "Financial Developments in London in the Seventeenth Century: The Financial Revolution Revisited," The Journal of Economic History, Cambridge University Press, vol. 82(2), pages 480-515, June.
    11. Debin Ma & Liuyan Zhao, 2020. "A silver transformation: Chinese monetary integration in times of political disintegration, 1898–1933," Economic History Review, Economic History Society, vol. 73(2), pages 513-539, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chen, Zhiwu & Lin, Zhan & Zhang, Xiaoming, 2024. "Hedging desperation: How kinship networks reduced cannibalism in historical China," Journal of Comparative Economics, Elsevier, vol. 52(2), pages 361-382.
    2. Volckart, Oliver, 2015. "Power politics and princely debts: why Germany’s common currency failed, 1549-1556," LSE Research Online Documents on Economics 64496, London School of Economics and Political Science, LSE Library.
    3. Sascha O. Becker & Jared Rubin & Ludger Woessmann, 2024. "Religion and Growth," Journal of Economic Literature, American Economic Association, vol. 62(3), pages 1094-1142, September.
    4. Alexander Fink, 2012. "The Hanseatic League and the Concept of Functional Overlapping Competing Jurisdictions," Kyklos, Wiley Blackwell, vol. 65(2), pages 194-217, May.
    5. Volckart, Oliver, 2021. "Trade in coinage, Gresham's Law, and the drive to monetary unification: the Holy Roman Empire, 1519-59," LSE Research Online Documents on Economics 109885, London School of Economics and Political Science, LSE Library.
    6. Wang, Xiaoyu & Long, Zhineng & Zhao, Xiangfang, 2024. "Merchant guild culture and cash holdings: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 94(C).
    7. Wang, Jun & Ang, James B., 2024. "Epidemics, disease control, and China’s long-term development," Journal of Comparative Economics, Elsevier, vol. 52(1), pages 93-112.
    8. Adrian R. Bell & Chris Brooks & Tony K. Moore, 2017. "Did Purchasing Power Parity Hold in Medieval Europe?," Manchester School, University of Manchester, vol. 85(6), pages 682-709, December.
    9. Boerner, Lars, 2016. "Medieval market making brokerage regulations in Central Western Europe, ca. 1250-1700," Economic History Working Papers 66834, London School of Economics and Political Science, Department of Economic History.
    10. Börner, Lars & Severgnini, Battista, 2011. "Epidemic trade," Discussion Papers 2011/12, Free University Berlin, School of Business & Economics.
    11. Volckart, Oliver, 2018. "The dear old holy Roman realm. How does it hold together? Monetary policies, cross-cutting cleavages and political cohesion in the age of reformation," Economic History Working Papers 90503, London School of Economics and Political Science, Department of Economic History.
    12. Volckart, Oliver, 2021. "Trade in coinage, Gresham's Law, and the drive to monetary unification: the Holy Roman Empire, 1519-59," Economic History Working Papers 109885, London School of Economics and Political Science, Department of Economic History.
    13. Feng, Chen & Bai, Caiquan & Kang, Yankun, 2023. "Historical social capital and contemporary private investment choices," Journal of Corporate Finance, Elsevier, vol. 79(C).
    14. Matthew Lowenstein, 2024. "Rotating savings and credit associations (ROSCAs) in prewar China: Communal finance and the roots of economic development," Economic History Review, Economic History Society, vol. 77(3), pages 796-822, August.
    15. Hanhui Guan & Nuno Palma & Meng Wu, 2024. "The rise and fall of paper money in Yuan China, 1260–1368," Economic History Review, Economic History Society, vol. 77(4), pages 1222-1250, November.
    16. Ishizu, Mina, 2021. "Metropolitan financial agents and the emergence of inter-regional financial linkages in England and Japan, 1760-1860," Economic History Working Papers 110963, London School of Economics and Political Science, Department of Economic History.
    17. Volckart, Oliver, 2022. "How successful was Germany's first common currency? A new look at the imperial monetary union of 1559," Economic History Working Papers 115007, London School of Economics and Political Science, Department of Economic History.
    18. Yu Zhang & Wenqi Zhang & Bowen Cheng, 2024. "The curse of spanning over millennium: Confucian culture and corruption in China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 32(2), pages 473-500, April.
    19. Ishizu, Mina, 2021. "Metropolitan financial agents and the emergence of inter-regional financial linkages in England and Japan, 1760-1860," LSE Research Online Documents on Economics 110963, London School of Economics and Political Science, LSE Library.
    20. Ding, Congming & Chen, Zhiyuan & Ma, Qiucen, 2025. "Traditional clans and environmental governance: Evidence from China," World Development, Elsevier, vol. 185(C).

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:63:y:2024:i:c:s1544612324003775. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.