Reka Juhasz (Princeton) will present:

"Temporary Protection and Technology Adoption: Evidence from the Napoleonic Blockade"

at 12:15pm on Tuesday, September 29, 2015 in 051 Buchanan (Volanakis) - TUCK

Lunch will be served at noon.

Please sign up for a meeting, or dinner at:

https://docs.google.com/spreadsheets/d/1ghS9jDJaeZKiwVtJwbLd1CvQiu10U0v_2tJyegbwbbM/edit?usp=sharing

If you will be attending the Lunch Seminar please RSVP to Richard Rielly at TUCK so he can order the appropriate amount of food.

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Abstract

This paper uses a natural experiment to assess whether temporary protection from trade with industrial leaders can foster development of infant industries in follower countries. Using a new dataset compiled from primary sources, I find that in the short-run regions (departements) in the French Empire which became better protected from trade with the British for exogenous reasons during the Napoleonic Wars (1803-15) increased capacity in a new technology, mechanised cotton spinning, to a larger extent than regions which remained more exposed to trade. Temporary protection had long term effects. In particular, by exploiting the fact that the post-war location of the cotton industry was determined to a large extent by the historical accident of the wars, I first show that the location of cotton spinning within France was persistent, and firms located in regions with higher post-war spinning capacity were more productive 30 years later. Second, I find that after the restoration of peace, exports of cotton goods from France increased substantially, consistent with evolving comparative advantage in cottons. Third, I show that as late as 1850, France and Belgium - both part of the French Empire prior to 1815 - had larger cotton spinning industries than other Continental European countries which were not protected from British trade during the wars; this suggests that adoption of the new technology was far from inevitable.