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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front. Econ. China    2018, Vol. 13 Issue (3) : 484-504    https://doi.org/10.3868/s060-007-018-0023-1
Orginal Article
How Did the Chinese Shanxi Merchants Determine the Remittance Fees? Micro Firm Analysis of Rishengchang Piaohao
Meng Wu()
Institute of Historical Research, University of London, London WC1E 7HU, UK
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Abstract

This paper examines the Chinese Shanxi piaohao, arguably the most important Chinese indigenous financial institutions in the 19th century. Concentrating on their business strategy, the study constructs a unique firm level set of data of the Rishengchang piaohao and explores the piaohao’s types of client, silver and drafts it dealt in, branch distributions, and terms to cash drafts. Besides this, this article also designs multiple linear regressions and identifies elements that determined remittance fees. My study reveals that, when establishing a new branch, the Rishengchang took the consideration of business conditions as its priority and gradually expanded from cities at prefecture level to those in counties and towns. A growth of business sites also led to an increase in the types of client, silver and draft it accepted. Moreover, as it developed, the interval for the Rishengchang to cash a draft shortened by half. When estimating the remittance functions, my study found that as the amount of silver being remitted increased, the length of time to cash a draft extended and as the average distance between two branches increased, the Rishengchang would charge more in remittance fees. “Commoners” and “gentry” would pay more than “firms,” while “other piaohao” would pay lower remittance fees. The drafts sent by telegram would also be much more expensive than those sent by letters or with papers. As the first detailed study on one of the most important and enduring firms in China, this work not only fills the data void where this subject is concerned, but also delineates the historical change of the piaohao’s clients, drafts, business territories and gives profound insights into the rise of the Shanxi piaohao.

Keywords Shanxi piaohao      pricing strategy      remittance      micro firm analysis      financial institution      Chinese native banks     
Issue Date: 30 September 2018
 Cite this article:   
Meng Wu. How Did the Chinese Shanxi Merchants Determine the Remittance Fees? Micro Firm Analysis of Rishengchang Piaohao[J]. Front. Econ. China, 2018, 13(3): 484-504.
 URL:  
https://academic.hep.com.cn/fec/EN/10.3868/s060-007-018-0023-1
https://academic.hep.com.cn/fec/EN/Y2018/V13/I3/484
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