French Colonial Trade Patterns: European Settlement

We investigate how the colonial strategy through the settlement decision affected French trade patterns. In this regard, we construct a new database relying on various primary historical sources containing information on the value of French sectoral trade between 1880 and 1913. Our results show that French colonies with more European settlements traded more with France, whereas the opposite is true for other colonies. We also investigate two channels through which European settlements might have affected the French trade pattern with colonies: institutions and networking. We find that better institutions brought by European settlements had a negative impact on trade with French colonies, while it promoted trade with British colonies. These results are consistent with the extractive nature of French trade relations with its colonies. As for networking, it increases overall French trade within French colonies but reduces it in other colonies.