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

Author

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  • Michael Huberman
  • Christopher M. Meissner
  • Kim Oosterlinck

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.

Suggested Citation

  • Michael Huberman & Christopher M. Meissner & Kim Oosterlinck, 2015. "Technology and Geography in the Second Industrial Revolution: New Evidence from the Margins of Trade," NBER Working Papers 20851, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:20851
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Le lien entre échanges et croissance lors de la première mondialisation
      by Martin Anota in D'un champ l'autre on 2015-02-10 00:26:36

    Citations

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    Cited by:

    1. Jacopo Timini, 2017. "Currency unions and heterogeneous trade effects: the case of the latin monetary union," Working Papers 1739, Banco de España;Working Papers Homepage.
    2. Alejandro Ayuso-Díaz & Antonio Tena-Junguito, 2019. "Trade in the Shadow of Power: Japanese Industrial Exports in the Interwar years," Working Papers 0153, European Historical Economics Society (EHES).
    3. Christopher M. Meissner & John P. Tang, 2017. "Upstart Industrialization and Exports, Japan 1880-1910," CEH Discussion Papers 04, Centre for Economic History, Research School of Economics, Australian National University.
    4. Varian, Brian, 2018. "The economics of Edwardian imperial preference: what can New Zealand reveal?," Economic History Working Papers 88298, London School of Economics and Political Science, Department of Economic History.
    5. Jacopo Timini, 2018. "The margins of trade: market entry and sector spillovers, the case of Italy (1862-1913)," Working Papers 1836, Banco de España;Working Papers Homepage.
    6. Patrick Alexander & Ian Keay, 2018. "Responding to the First Era of Globalization: Canadian Trade Policy, 1870–1913," Staff Working Papers 18-42, Bank of Canada.
    7. repec:eee:exehis:v:68:y:2018:i:c:p:1-15 is not listed on IDEAS
    8. Eichengreen, Barry & Mehl, Arnaud & Chiţu, Livia, 2019. "Mars or mercury redux: the geopolitics of bilateral trade agreements," Working Paper Series 2246, European Central Bank.
    9. MEISSNER Christopher & BECUWE Stéphane & BLANCHETON Bertrand, 2015. "France’s international insertion strategy in globalization in long run perspective 1836-1938," Cahiers du GREThA 2015-18, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    10. Stephane Becuwe & Bertrand Blancheton & Leo Charles & Matthieu Clement, 2015. "Asymmetric influence of distance on french international trade 1850-1913," EcoMod2015 8552, EcoMod.
    11. Stéphane Becuwe & Bertrand Blancheton & Christopher M. Meissner, 2015. "Stages of Diversification: France, 1836-1938," NBER Working Papers 21777, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • N73 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: Pre-1913

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