A comparative study of late-imperial and early-republican private property rights institutions, as measured by their effects on Shanghai's early financial markets

Harris, Jamesdaniel Adam (2018) A comparative study of late-imperial and early-republican private property rights institutions, as measured by their effects on Shanghai's early financial markets. PhD thesis, London School of Economics and Political Science.

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Abstract

This research presents an analysis of Shanghai's two separate, parallel but simultaneously coexisting institutional environments, one operating under control of the Chinese central government, and the other under an extraterritorial system defined by foreign (mainly British, American, and French) political and legal conceptualisations. This institutionally dichotomic condition characterised Shanghai for over one hundred years, from the mid-nineteenth to midtwentieth centuries, throughout the course of amid tumultuous political upheaval shaping the domestic political landscape. The nature of these parallel institutional environments in large part reflected the period's political events; the era's political turmoil, via their impact on the nature of institutional protections on private property, contract, and investor rights, concomitantly helped determine Shanghai's economic development, including the development of the city's financial markets. While China's broader domestic institutional framework over this period has received considerable attention in the literature, there exists debate regarding the nature of the strength and efficacy of the domestic institutional environment, particularly in regard to issues pertaining to state capacity and protection of private property rights. This debate is reflective of similar debate within Chinese economic history, one that has portrayed China's late-imperial and republican economic growth as signified mostly by failure, yet with recent revisionist work providing intriguing empirical evidence suggesting considerably stronger economic growth to have occurred throughout the period. In a parallel manifestation, a robust revisionist literature has presented an effective challenge to the standard conventional literature has tended to view the domestic institutional environment over the period as inherently weak and ineffective. In this research project, we utilise Shanghai's unique dualistic institutional setting over this period to help address this debate in the literature. Specifically, we identify how differences between these two institutional frameworks impacted economic actors' behaviour, with a particular emphasis on the revealed preferences displayed by investors acting within Shanghai's early financial markets. To undertake our analysis, we construct an original dataset based on archival records of bond and equity prices that traded on Shanghai's early stock exchanges. The market pricing and trading activity associated with similarly constructed financial instruments, differing primarily in terms of the issuer –whether a domestic or extraterritorial entity– reflect the differing perceptions that contemporaneous investors ascribed to the broader institutional environments. This economic and financial historical research project therefore utilises analysis of contemporaneous investor perceptions to examine not only Shanghai's early financial markets, but also to draw broader conclusions regarding Shanghai's dual institutional environment from a comparative perspective, as well as providing a new viewpoint on a long-standing debate in the literature regarding the efficacy and strength of China's domestic institutional foundations over the late-imperial and early republican time period.

Item Type:	Thesis (PhD)
Additional Information:	© 2018 Jamesdaniel Adam Harris
Library of Congress subject classification:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance
Sets:	Departments > Economic History
Supervisor:	Deng, Kent
URI:	http://etheses.lse.ac.uk/id/eprint/4058

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