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Opium and Empire: Some Evidence from Colonial-Era Asian Stock and Commodity Markets

Published online by Cambridge University Press:  08 October 2001

Warren Bailey  and
Lan Truong
Warren Bailey
Affiliation:
The Johnson Graduate School of Management at Cornell University (Sage Hall, Ithaca, NY 14853-6201, USA). WBB1@cornell.edu
Lan Truong
Affiliation:
1614-D Belmont St.NW, Washington, DC 20009, USA, ljt5@cornell.edu
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Abstract

On the basis of a new database of stock and commodity prices, along with measures of government revenues, commodity exports and immigration, the article assesses the impact of the opium trade on the economies of colonial Malaya, the Netherlands Indies and China from 1873 to 1911. Stock returns for a few Malayan industries related to international trade are significantly correlated with opium price changes, as are prices for labour-intensive, Chinese-dominated export commodities such as tin and gambier. However, opium price changes explain, at most, only a small fraction of the behaviour of stock and commodity prices. On balance, stock and commodity markets ascribed only secondary importance to ups and downs in the opium trade as measured by the price of the drug.

Type
Articles
Information
Journal of Southeast Asian Studies , Volume 32 , Issue 2 , June 2001 , pp. 173 - 193
Copyright
© 2001 The National University, Singapore

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