Banking and industrialization
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We establish a causal role for banking access in the spread of the Industrial Revolution over the period 1817–1881 by exploiting unique employment data from 10,528 parishes across England and Wales and a novel instrument. We estimate that a one standard deviation increase in 1817 finance employment increases annualized industrial employment growth by 0.93 percentage points. We establish the role of structural transformation as an underlying growth mechanism and show that banking access: (i) increases the industrial employment share; (ii) stimulates urbanization; and (iii) fosters inter-industry transition to high TFP, intermediate and capital-intensive sub-sectors.
Heblich , S & Trew , A 2019 , ' Banking and industrialization ' , Journal of the European Economic Association , vol. 17 , no. 6 , pp. 1753-1796 . https://doi.org/10.1093/jeea/jvy037
Journal of the European Economic Association
© 2018, the Author(s). Published by Oxford University Press on behalf of European Economic Association. This work has been made available online in accordance with the publisher’s policies. This is the author created, accepted version manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at https://doi.org/10.1093/jeea/jvy037
DescriptionResearch for this paper was supported by the Institute for New Economic Thinking (INET) Grant No. INO15-00025.
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