Technology and Geography in the Second Industrial Revolution: New Evidence from the Margins of Trade

Michael Huberman, Christopher Meissner and Kim Oosterlinck

No 20851, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In the Belle Époque, Belgium recorded an unprecedented trade boom, but growth in output per capita was lackluster. We seek to reconcile this ostensible paradox. Because of the sharp decline in both fixed and variable trade costs, the trade boom was as much about the expansion in the number of products delivered and markets served as it was about shipping more of the same old products. We use a new highly disaggregated data set on bilateral exports at the product level to illustrate these claims. In line with new trade theory, the effect of trade on productivity was mediated by sector-level firm heterogeneity and product differentiation. In new technology sectors, like tramways, the high degree of firm heterogeneity amplified the effect of trade on productivity. But in other sectors, mainly old staple industries like cotton textiles, a high level of firm uniformity muted the effect of trade. Into the twentieth century, old staples trumped new technology sectors, per capita income growing modestly as a result.

JEL-codes: F14 F15 N73 (search for similar items in EconPapers)
Date: 2015-01
New Economics Papers: this item is included in nep-gro, nep-his and nep-int
Note: DAE
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Citations: View citations in EconPapers (3)

Published as Huberman, Michael & Meissner, Christopher M. & Oosterlinck, Kim, 2017. "Technology and Geography in the Second Industrial Revolution: New Evidence from the Margins of Trade," The Journal of Economic History, Cambridge University Press, vol. 77(01), pages 39-89, March.

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Journal Article: Technology and Geography in the Second Industrial Revolution: New Evidence from the Margins of Trade (2017)
Working Paper: Technology and Geography in the Second Industrial Revolution: New Evidence from the Margins of Trade (2017)
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