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Cotton Textiles and the Great Divergence: Lancashire, India and Shifting Competitive Advantage, 1600-1850

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  • Broadberry, Stephen N
  • Gupta, Bishnupriya

Abstract

The growth of cotton textile imports into Britain from India opened up new opportunities for import substitution as the new cloths, patterns and designs became increasingly fashionable. However, high silver wages in Britain as a result of high productivity in other tradable goods and services, meant that British producers of cotton textiles could not use labour-intensive Indian production methods. The growth in British labour productivity that resulted from the search for labour-saving technological progress meant that unit labour costs became lower than in India despite the much higher wages in Britain. However, the full effects of the rise in British productivity were delayed until after the Napoleonic Wars by increasing wage and raw cotton costs before supply adjusted to the major increase in demand for inputs. On balance, the effects of British protective measures were neutral.

Suggested Citation

  • Broadberry, Stephen N & Gupta, Bishnupriya, 2005. "Cotton Textiles and the Great Divergence: Lancashire, India and Shifting Competitive Advantage, 1600-1850," CEPR Discussion Papers 5183, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5183
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    References listed on IDEAS

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    Cited by:

    1. Nico Voigtländer & Hans-Joachim Voth, 2006. "Why England? Demographic factors, structural change and physical capital accumulation during the Industrial Revolution," Journal of Economic Growth, Springer, vol. 11(4), pages 319-361, December.
    2. David Mayer-Foulkes, 2008. "Economic Challenges for Global Governance," Working papers DTE 428, CIDE, División de Economía.
    3. Florian Brugger & Christian Gehrke, 2017. "Skilling and Deskilling Technological Change in Classical Economic Theory and Its Empirical Evidence," Working Paper Series, Social and Economic Sciences 2017-02, Faculty of Social and Economic Sciences, Karl-Franzens-University Graz.
    4. David Mayer Foulkes., 2007. "Subdesarrollo y globalización," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 155-192, May.

    More about this item

    Keywords

    competitive advantage; cotton; India; Lancashire; unit labour costs;

    JEL classification:

    • N60 - Economic History - - Manufacturing and Construction - - - General, International, or Comparative
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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