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External economies of scale in the Lancashire cotton industry, 1900–1950[Note 1. Without implicating them, we thank Brian A’Hearn, Theo Balderston, ...]
Author(s) -
Broadberry Stephen,
Marrison Andrew
Publication year - 2002
Publication title -
the economic history review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.014
H-Index - 49
eISSN - 1468-0289
pISSN - 0013-0117
DOI - 10.1111/1468-0289.00214
Subject(s) - economies of scale , diseconomies of scale , economics , externality , arrow , productivity , earnings , romer , economies of agglomeration , scale (ratio) , returns to scale , wage , economy , market economy , production (economics) , macroeconomics , microeconomics , physics , cartography , accounting , quantum mechanics , computer science , programming language , geography
This article provides three types of evidence for external economies of scale in the Lancashire cotton industry. Anglo‐American productivity differences are used to demon‐strate external economies at the industry level. Econometric evidence of dynamic (Marshall‐Arrow‐Romer) external economies of localization in spinning and weaving is provided using individual earnings data. A case study of a merchant firm demonstrates the build‐up of dynamic (Jacobs) externalities of urbanization. It is argued that the persistence of a large merchant community generating external economies of scale helped to delay Britain's loss of comparative advantage to low wage producers.