Profitability of small- and medium-sized enterprises in Marshall’s time: sector and spatial heterogeneity in the nineteenth century

Robert Bennett, Harry Smith, Piero Montebruno and Carry Van Lieshout

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

Abstract: New data on profit heterogeneity of small- and medium-sized firms for 1861–81 in England and Wales are used to reinterpret Marshall's contemporary insights. Profit level differences are chiefly explained by location, mainly urbanisation effects. But profitability (profit per worker) is mainly explained by sectors, at both 1-digit and 5-digit level. Sector market opportunities reflected barriers to market entry which limited substitutability for the services of the professions, some manufacturing and maker-dealing industries. Localisation mainly reflected urban/rural differences, accessibility to railways and to a lesser extent waterways. Differences in firm-level organisation (measured by portfolio diversification and partnerships) were less significant for explaining profit heterogeneity than sector or localisation. Demographic effects such as an entrepreneur's age had little significance. Marshall's insight of convergence to mean industry-sector profitability, with localisation as a secondary influence, is confirmed, but there remain unexplained elements of heterogeneity indicating important roles of entrepreneurial agency.

JEL-codes: L11 L22 L25 L29 (search for similar items in EconPapers)
Date: 2022-01-19
New Economics Papers: this item is included in nep-eff, nep-geo, nep-his, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Cambridge Journal of Economics, 19, January, 2022, 46(1), pp. 219 - 249. ISSN: 0309-166X

Downloads: (external link)
http://eprints.lse.ac.uk/113883/ Open access version. (application/pdf)

Related works:
Journal Article: Profitability of small- and medium-sized enterprises in Marshall’s time: sector and spatial heterogeneity in the nineteenth century (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:113883

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().