Financial Development Promotes Market Integration—Evidence from Piaohao Establishment and Grain Market in the Qing Dynasty
This research examines the impact of financial innovation on promoting market development taking advantage of the decrease of transaction cost caused by innovation of payment method brought by Piaohao(exchange shop).We collect historical data of the establishment time of Piaohao in different pre-fectures and match them with the monthly data of the prefecture-pair rice price from 1800 to 1911.The empirical results show that establishment of Piaohao tend to reduce dispersion degree of rice price in the locality by about 7.24％by using a DID estimation.The mechanism lies in that the"Piaohao sub-center"as the capital adjustment and draft clearing center,gives rise to 16.00％of rice price convergence effect.
万方数据
