Technology Adoption and Productivity Growth: Evidence from Industrialization in France

42 Pages Posted: 14 Jul 2020 Last revised: 26 May 2023

See all articles by Réka Juhász

Réka Juhász

University of British Columbia (UBC); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

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)

Multiple version iconThere are 3 versions of this paper

Date Written: July 2020

Abstract

New technologies tend to be adopted slowly and – even after being adopted – take time to be reflected in higher aggregate productivity. One prominent explanation for these patterns is the need to reorganize production, which often goes hand-in-hand with major technological breakthroughs. We study a unique setting that allows us to examine the empirical relevance of this explanation: the adoption of mechanized cotton spinning during the First Industrial Revolution in France. The new technology required reorganizing production by moving workers from their homes to the newly-formed factories. Using a novel hand-collected plant-level dataset from French archival sources, we show that productivity growth in mechanized cotton spinning was driven by the disappearance of plants in the lower tail – in contrast to other sectors that did not need to reorganize when new technologies were introduced. We provide evidence that this was driven by organizational challenges such as developing optimal plant layout. A process of ‘trial and error’ led to initially low and widely dispersed productivity, and – in the subsequent decades – to high productivity growth as knowledge diffused through the economy and new entrants adopted improved methods of organizing production.

Suggested Citation

Juhász, Réka and Squicciarini, Mara and Voigtländer, Nico, Technology Adoption and Productivity Growth: Evidence from Industrialization in France (July 2020). NBER Working Paper No. w27503, Available at SSRN: https://ssrn.com/abstract=3649867

Réka Juhász (Contact Author)

University of British Columbia (UBC) ( email )

2329 West Mall
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Canada

National Bureau of Economic Research (NBER) ( email )

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Centre for Economic Policy Research (CEPR) ( email )

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Mara Squicciarini

Bocconi University ( email )

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Italy

Nico Voigtländer

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

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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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Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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