Markets in China and Europe on the Eve of the Industrial Revolution

Carol Shiue () and Wolfgang Keller

American Economic Review, 2007, vol. 97, issue 4, 1189-1216

Abstract: Why did Western Europe industrialize first? An influential view holds that its exceptionally well-functioning markets supported with a certain set of institutions provided the incentives to make investments needed to industrialize. This paper examines this hypothesis by comparing the actual performance of markets in terms of market integration in Western Europe and China, two regions that were relatively advanced in the preindustrial period, but would start to industrialize about 150 years apart. We find that the performance of markets in China and Western Europe overall was comparable in the late eighteenth century. Market performance in England was higher than in the Yangzi Delta, and markets in England also performed better than those in continental Western Europe. This suggests strong market performance may be necessary, but it is not sufficient for industrialization. Rather than being a key condition for subsequent growth, improvements in market performance and growth occurred simultaneously. (JEL N13, N15, O47)

Date: 2007
Note: DOI: 10.1257/aer.97.4.1189
References: Add references at CitEc
Citations: View citations in EconPapers (121)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.97.4.1189 (application/pdf)
http://www.aeaweb.org/aer/data/sept07/20040419_data.zip (application/zip)
http://www.aeaweb.org/aer/data/sept07/20040419_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Markets in China and Europe on the Eve of the Industrial Revolution (2004)
Working Paper: Markets in China and Europe on the Eve of the Industrial Revolution (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:97:y:2007:i:4:p:1189-1216

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().