Cotton Textiles and the Great Divergence: Lancashire, India and Shifting Competitive Advantage, 1600-1850

Stephen Broadberry and Bishnupriya Gupta

No 5183, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The growth of cotton textile imports into Britain from India opened up new opportunities for import substitution as the new cloths, patterns and designs became increasingly fashionable. However, high silver wages in Britain as a result of high productivity in other tradable goods and services, meant that British producers of cotton textiles could not use labour-intensive Indian production methods. The growth in British labour productivity that resulted from the search for labour-saving technological progress meant that unit labour costs became lower than in India despite the much higher wages in Britain. However, the full effects of the rise in British productivity were delayed until after the Napoleonic Wars by increasing wage and raw cotton costs before supply adjusted to the major increase in demand for inputs. On balance, the effects of British protective measures were neutral.

Keywords: Cotton; Competitive advantage; Unit labour costs; Lancashire; India (search for similar items in EconPapers)
JEL-codes: N60 N70 O14 O31 (search for similar items in EconPapers)
Date: 2005-08
New Economics Papers: this item is included in nep-cwa, nep-dev and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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