LAND RIGHTS, LOCAL FINANCIAL DEVELOPMENT AND INDUSTRIAL ACTIVITY: EVIDENCE FROM FLANDERS (19TH – EARLY 20TH CENTURY)
Nicolas De Vijlder () and
Koen Schoors ()
Additional contact information
Koen Schoors: -
Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration
In this paper we investigate the hypothesis that the economic divergence across Flemish localities between 1830 and 1910 is explained by the theory of Hernando de Soto. We hypothesize that the uniform land rights installed after the French revolution provided borrowers with an attractive form of collateral. Conditional on the presence of local financial development provided by a new government-owned bank this eased access to external finance and fostered industrial and commercial economic activity. Using primary historical data of about 1179 localities in Flanders we find that the variation in the local value of land (collateral) and the variation in local financial development jointly explain a substantial amount of the variation in non-agricultural employment accumulated between 1830 and 1910. By 1910 industrial and commercial economic activity was more developed in localities where both early (1846) rural land prices were high and early (1880) local financial development was more pronounced, which is in line with the “de Soto” hypothesis.
Keywords: de Soto; financial institutions; industrial development; land prices; Flanders; 19th - 20th centuries (search for similar items in EconPapers)
JEL-codes: N93 O43 R11 R12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fdg, nep-geo, nep-gro, nep-his and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:19/962
Access Statistics for this paper
More papers in Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration Contact information at EDIRC.
Bibliographic data for series maintained by Nathalie Verhaeghe ().