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
If you will be attending the Lunch Seminar and have not already done so, please RSVP to Richard Rielly at TUCK so he can order the appropriate amount of food.
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.