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The Location of the UK Cotton Textiles Industry in 1838: a Quantitative Analysis

  • Crafts, Nicholas

    (University of Warwick)

  • Wolf, Nikolaus

    (Humboldt University)

We examine the geography of cotton textiles in Britain in 1838 to test claims about why the industry came to be so heavily concentrated in Lancashire. Our analysis considers both first and second nature aspects of geography including the availability of water power, humidity, coal prices, market access and sunk costs. We show that some of these characteristics have substantial explanatory power. Moreover, we exploit the change from water to steam power to show that the persistent effect of first nature characteristics on industry location can be explained by a combination of sunk costs and agglomeration effects.

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File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/research/wpfeed/148-2013_crafts.pdf
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Paper provided by Competitive Advantage in the Global Economy (CAGE) in its series CAGE Online Working Paper Series with number 148.

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Date of creation: 2013
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Handle: RePEc:cge:wacage:148
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Web page: http://www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/

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  1. Head, Keith & Mayer, Thierry, 2005. "Regional Wage and Employment Responses to Market Potential in the EU," CEPR Discussion Papers 4908, C.E.P.R. Discussion Papers.
  2. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  3. Becker, Sascha O. & Ekholm, Karolina & Jäckle, Robert & Muendler, Marc-Andreas, 2005. "Location Choice and Employment Decisions: A Comparison of German and Swedish Multinationals," CEPR Discussion Papers 4887, C.E.P.R. Discussion Papers.
  4. Kurt Schmidheiny & Marius Brülhart, 2009. "On the equivalence of location choice models: conditional logit, nested logit and poisson," Working Papers 2009/14, Institut d'Economia de Barcelona (IEB).
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  7. Peter Solar & John Lyons, 2011. "The English cotton spinning industry, 1780-1840, as revealed in the columns of the London Gazette," Business History, Taylor & Francis Journals, vol. 53(3), pages 302-323.
  8. Marc J. Melitz & Stephen J. Redding, 2012. "Heterogeneous Firms and Trade," NBER Working Papers 18652, National Bureau of Economic Research, Inc.
  9. Stephen Redding & Daniel.M Sturm & Nikolaus Wolf, 2007. "History and industry location: evidence from German airports," LSE Research Online Documents on Economics 3680, London School of Economics and Political Science, LSE Library.
  10. Head, Keith & Mayer, Thierry, 2002. "Market Potential and the Location of Japanese Investment in the European Union," CEPR Discussion Papers 3455, C.E.P.R. Discussion Papers.
  11. Ros S, Joan R., 2003. "Why Isn't the Whole of Spain Industrialized? New Economic Geography and Early Industrialization, 1797 1910," The Journal of Economic History, Cambridge University Press, vol. 63(04), pages 995-1022, December.
  12. Paulo Guimaraes & Octavio Figueiredo & Douglas Woodward, 2000. "A tractable approach to the firm location decision problem," NIMA Working Papers 2, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
  13. Motta, Massimo & Thisse, Jacques-Francois, 1994. "Does environmental dumping lead to delocation?," European Economic Review, Elsevier, vol. 38(3-4), pages 563-576, April.
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