| 讲座简介： | Abstract The paradox of China’s failure to industrialize despite its thriving commercialization before the 19th century has been debated intensively, especially in terms of whether market efficiency is sufficient for industrialization in the pre-modern period. This paper sheds light on this question using archival data on grain prices covering Qing China’s most prosperous episode (1740-1820) to identify the true extent of market integration. Our results suggest that China’s market efficiency on the eve of Western industrialization has been grossly overstated, and further imply that China’s market was heavily influenced by its bureaucratic structure. Our analysis is based on a historical dataset of monthly grain prices (rice, wheat) in 211 prefectures across China and we match these with new data on the physical geography of the postal, river network, mountain distribution as well as bureaucratic structure. We employ novel panel time series methods to account for the common shocks and to investigate the evolving process of market integration over time. This analysis indicates that China experienced continuous market disintegration with fragmentation driven by provincial border. Our results, after controlling for weather and conflict, also suggest that Qing's market disintegration and fragmentation was correlated with population growth and fiscal revenue decline respectively. Since Qing's market decline was associated with the dynasty decline, we may need to reconsider the relationship between market performance and growth, especially during the Great Divergence. Keywords: market integration, price convergence, panel time series, common factor model, cross-section dependence JEL codes:F15; N75;L11;C23 |
