Foreigners Knocking on the Door: Trade in China During the Treaty Port Era / Wolfgang Keller, Javier Andres Santiago, Carol H. Shiue.

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Keller, Wolfgang

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w21886.Publication details: Cambridge, Mass. National Bureau of Economic Research 2016.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Uneven development within countries suggests that domestic trade frictions are important. Trade flows within a country, however, are rarely observed. We employ a new dataset on trade between fifteen Chinese treaty ports to examine the importance of domestic frictions around the year 1900. The distribution of welfare effects depends on each port's productivity and factor costs, China's economic geography as it influences trade costs, as well as the degree of regional diversity in production, which increases the potential gains from trade. We utilize this framework to quantify the size and distribution of welfare effects resulting from new technology and lower trade costs. Domestic trade frictions turn out to be substantial, far from the frictionless world that is commonly assumed. Moreover, geographic barriers loom large in shaping the welfare gains from technology improvements and trade cost reductions. We find, however, that an important explanation for why there was a limit to what could be gained through increased domes- tic trade was that the differences in productivity across regions of China in the 19th century were relatively low.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w21886 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w21883 Global Supply Chains and Trade Policy /	nber w21884 Cables, Sharks and Servers: Technology and the Geography of the Foreign Exchange Market /	nber w21885 The Micro Origins of International Business Cycle Comovement /	nber w21886 Foreigners Knocking on the Door: Trade in China During the Treaty Port Era /	nber w21887 The Evolution of Gender Gaps in Industrialized Countries /	nber w21888 Options-Pricing Formula with Disaster Risk /	nber w21889 Patents and Research Investments: Assessing the Empirical Evidence /	Next

January 2016.

Uneven development within countries suggests that domestic trade frictions are important. Trade flows within a country, however, are rarely observed. We employ a new dataset on trade between fifteen Chinese treaty ports to examine the importance of domestic frictions around the year 1900. The distribution of welfare effects depends on each port's productivity and factor costs, China's economic geography as it influences trade costs, as well as the degree of regional diversity in production, which increases the potential gains from trade. We utilize this framework to quantify the size and distribution of welfare effects resulting from new technology and lower trade costs. Domestic trade frictions turn out to be substantial, far from the frictionless world that is commonly assumed. Moreover, geographic barriers loom large in shaping the welfare gains from technology improvements and trade cost reductions. We find, however, that an important explanation for why there was a limit to what could be gained through increased domes- tic trade was that the differences in productivity across regions of China in the 19th century were relatively low.