【主题】How Does Communication Infrastructure Affect Markets? Evidence from the Telegraph Network in China
【报告人】雷宇翔 (助理教授, 耶鲁-新加坡国立大学学院)
【摘要/Abstract】Learning market information is costly in history. A vast telegraph network revolutionized information transmission in 19th century China when the railway had been rarely adopted. Exploiting this unique historical setting, this paper examines how timely information brought by the telegraph affected the grain market. Using a difference-in-differences estimation and a newly collected dataset, we first show that extreme prices for widely tradable grain fell in telegraph-connected regions immediately after the device was adopted. This effect was stronger in regions that were more likely to rely on grain imports. Second, we also find the telegraph access had a mean-reverting effect on price volatility in connected regions. Overall, our findings suggest that timely information benefited markets to better insure against idiosyncratic shocks, but it imposes costs on consumers in regions with stable historical prices. Our additional findings also shed light on the complementarity between the information friction and transportation costs.