Working Paper: CEPR ID: DP4138
Authors: Wolfgang Keller; Carol Shiue
Abstract: Geography shapes economic outcomes in a major way. This Paper uses spatial empirical methods to detect and analyse trade patterns in a historical dataset on Chinese rice prices. Our results suggest that spatial features were important for the expansion of interregional trade. Geography dictates, first, over what distances trade was possible in different regions, because the costs of ship transport were considerably below those for land transport. Spatial features also influence the direction in which a trading network is expanding. Moreover, our analysis captures the impact of new trade routes both within and outside the trading areas. We also discuss the long-run implications this might have.
Keywords: 18th century; China; coastal transport; geography; river transport; spatial autocorrelation; spatial econometrics; trade and transport costs
JEL Codes: F10; O10; R10; R40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Geography (R12) | Interregional trade patterns (F14) |
| Spatial features (C49) | Trade distances (R12) |
| Lower transport costs by ship (L92) | Trade distances (R12) |
| Spatial features (C49) | Trade direction (F10) |
| Emergence of new trade routes (F12) | Trade dynamics (F14) |
| Geographic factors (R12) | Relative prices of rice (P22) |
| Interregional trade (F14) | Autarky prices (P22) |
| Trade (F19) | Technological and institutional innovations (O35) |