Working Paper: NBER ID: w1385
Authors: Kenneth L. Sokoloff
Abstract: This paper utilizes a survey of the US manufacturing firms from 1832 to investigate the structure of manufacturing investment during early industrialization. Although several manufacturing industries, such as cotton textiles, depart from the pattern, most appear to have devoted the hulk of their investments to working capitaL This variation across industries in the composition of capital investmentsis indicative of a more general variation in factor intensities, and bears on the issues of why industries became concentrated in the regions they did, and the degrees to which they were adversely affected by the limited availability of long-term loans. Evidence that most manufacturing industries had quite modest investments in machinery and tools per unit of labor is also presented, serving to undercut the notion that the early period of industrialization was based on a proliferation of new, machinery-intensive technologies
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Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| firm size (L25) | machinery investment (E22) |
| firm size (L25) | capital investment decisions (G31) |
| working capital share (D33) | industrial expansion (N11) |
| limited long-term credit (G21) | industrial expansion (N11) |
| industry type (L89) | capital investment structure (G31) |