Quantifying connectivity: the causal effect of railway accessibility on local industrial economic outcomes, France 1846-1865

Josephine Precetti

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: France’s railway expansion following the Law of 11 June 1842 significantly reshaped nationwide connectivity and economic opportunities. This dissertation investigates the causal impacts of railway access between 1846 and 1861 on city-level industrial development. Using a dataset combining industrial surveys with digitized railway records, it employs a robust Difference-in-Differences approach, leveraging the quasi-exogenous roll-out of the centrally planned ‘étoile de Legrand’ railway network. Empirical results show railway access increased industrial activity primarily extensively: railway-connected cities saw approximately a 20% rise in the number of factories and workers, especially in labour-intensive sectors like textile in Lille and ceramics in Limoges. Yet, intensive effects such as factory size, productivity, and wages remained statistically and economically negligible. Contrary to theoretical predictions from trade and New Economic Geography models, capital-intensive sectors, such as metallurgy in Lorraine, did not exhibit statistically significant responsiveness. These findings reframe the role of transport infrastructure from being a deterministic catalyst to being better understood as a conditional enabler. While railways expanded market potential, their short to medium term transformative impact critically depended on complementary institutional frameworks notably financial markets and property rights, technological readiness, and regional contexts. Acknowledging the historical data limitations, this study underscores that transport infrastructure alone is insufficient for structural economic upgrading without the appropriate institutional, technological, and human capital conditions in place at the right time.

JEL-codes: N73 R40 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2025-10
New Economics Papers: this item is included in nep-geo, nep-his, nep-tre and nep-ure
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