Technology Adoption and Productivity Growth During the Industrial Revolution: Evidence from France

65 Pages Posted: 10 Jan 2020

See all articles by Réka Juhász

Réka Juhász

Columbia University

Mara Squicciarini

Bocconi University

Nico Voigtländer

University of California, Los Angeles (UCLA) - Anderson School of Management; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: December 20, 2019

Abstract

We construct a novel dataset to examine the process of technology adoption during a period of rapid technological change: The diffusion of mechanized cotton spinning during the Industrial Revolution in France. We exploit a key feature of the setting that allows us to isolate the productivity distribution of the adopters of new technology: Before mechanization, cotton spinning was performed in households, while production in firms only emerged with the new technology around 1800. We contrast the evolution of the productivity distribution for mechanized cotton spinners to two comparison sectors -- metallurgy and paper milling. We document several stylized facts that can explain the well-documented puzzle that major technological breakthroughs tend to be adopted slowly across firms and -- even after being adopted -- take time to be reflected in higher aggregate productivity: Relative to the comparison sectors, the productivity of firms in mechanized cotton spinning was initially highly dispersed. Over the subsequent decades, cotton spinning experienced dramatic productivity growth that was almost entirely driven by a disappearance of firms in the lower tail, while innovations in the comparison sectors shifted the whole productivity distribution. Rich historical evidence suggests that these patterns were driven by the need to re-organize production under the new technology. This process of 'trial and error' led to widely dispersed initial productivity 'draws,' low initial average productivity, and -- in the subsequent decades -- to high productivity growth as new entrants adopted improved methods of production and organization. We document evidence consistent with this mechanism through the spatial diffusion of best practice knowledge.

Keywords: Industrialization, Technology Adoption, Firm Productivity

JEL Classification: F63, O14

Suggested Citation

Juhász, Réka and Squicciarini, Mara and Voigtländer, Nico, Technology Adoption and Productivity Growth During the Industrial Revolution: Evidence from France (December 20, 2019). Available at SSRN: https://ssrn.com/abstract=3507694 or http://dx.doi.org/10.2139/ssrn.3507694

Réka Juhász (Contact Author)

Columbia University

3022 Broadway
New York, NY 10027
United States

Mara Squicciarini

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

Nico Voigtländer

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
+1-310-794 6382 (Phone)

HOME PAGE: http://www.anderson.ucla.edu/faculty/nico.v/

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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