The evolution of markets in China and Western Europe on the eve of industrialisation

Daniel Bernhofen, Markus Eberhardt, Jianan Li and Stephen Morgan

No 2017-12, Discussion Papers from University of Nottingham, GEP

Abstract: We use monthly prefectural data for Southern China (1740-1820) to implement a dynamic version of Shiue and Keller’s (2007) seminal analysis of spatial market integration. Our cointegration analysis is carried out for rolling windows of 20 years, rather than their static cross-section, and uncovers a secular decline in market integration across all bilateral distance categories of Southern China. When comparing Chinese prefectures less than 150 km apart with Belgian markets (1765-94) and English counties (1770-1820) in the same distance category, we observe similar degrees of market integration for 1740s China and mid-18th century Belgium and England. While the two European countries maintain stable levels of integration over time, we find substantial decline in China relative to the West, in particular when the analysis is limited to the economically most advanced Lower Yangtze region or the prefectures along the Yangtze River.

Keywords: market integration; 18th century; China and Western Europe; cointegration (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-cna and nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:not:notgep:17/12

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