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Frontiers of Economics in China

Front. Econ. China    2018, Vol. 13 Issue (3) : 505-530     https://doi.org/10.3868/s060-007-018-0024-8
Orginal Article |
Surviving Unstable Property Rights in Early Modern China: A Case Study of Young Brother Bank
Jinsong Zhao1(), Hao Pang2()
1. School of Economics, Southwestern University of Finance and Economics, Chengdu 611130, China
2. School of Economics, Peking University, Beijing 100871, China
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Abstract

China’s banking industry experienced rapid growth during the free access era from 1911 to 1927. However, the reasons private banks were so successful then remain unclear, particularly when property rights were not well protected due to government intervention. Using archived Young Brother Bank documents, we describe the bank’s development from its founding as a family firm through its reinvention from a partnership into a corporation. We focus on organizational form choice and bank performance in this case study. We find that bankers in early modern China gain political connections by placing influential nonfamily members (often, acquisitive local warlords) on boards of directors because this protects them from the depredations of those warlords. This is a precondition for operating family businesses in unstable political circumstances.

Keywords organizational form      family bank      early modern China      property rights      banking industry     
Issue Date: 30 September 2018
 Cite this article:   
Jinsong Zhao,Hao Pang. Surviving Unstable Property Rights in Early Modern China: A Case Study of Young Brother Bank[J]. Front. Econ. China, 2018, 13(3): 505-530.
 URL:  
http://journal.hep.com.cn/fec/EN/10.3868/s060-007-018-0024-8
http://journal.hep.com.cn/fec/EN/Y2018/V13/I3/505
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