Information costs and trade: Evidence from international electric telegraphy during the "golden age" of globalisation

Sean Bottomley and Brian D. Varian

No 9, CEH Discussion Papers from Centre for Economic History, Research School of Economics, Australian National University

Abstract: The development of the international telegraph network coincided with the nineteenth-century "golden age" of globalisation, but whether the former contributed to the latter is a question that has, hitherto, received only limited attention from economic historians. Fundamentally, it is a question that concerns the relationship between information-cost-reducing technology and trade. This paper introduces and utilises what is, we believe, the most comprehensive dataset of the years of international telegraphic linkages ever to have been compiled. Empirically, we analyse the effect of these telegraphic linkages on polity-specific British exports from 1849-90. Aside from intra-Empire trade flows, we find no statistically significant effect of the telegraph on British exports. Furthermore, we argue that previous estimates of the effect of the telegraph network on trade are implausibly high.

Keywords: globalisation; information costs; nineteenth century; technology; telegraph; trade (search for similar items in EconPapers)
JEL-codes: F15 N70 (search for similar items in EconPapers)
Date: 2024-10
New Economics Papers: this item is included in nep-his and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:auu:hpaper:125

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