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

Shuaishuai Du, Shijun He, Guitian Huang and Dongmin Kong

Finance Research Letters, 2024, vol. 63, issue C

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.

Keywords: Piaohao establishment; Silver–copper exchange rate; Financial expansion; Difference-in-differences (search for similar items in EconPapers)
JEL-codes: E43 N25 O16 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:63:y:2024:i:c:s1544612324003775

DOI: 10.1016/j.frl.2024.105347

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