Banking and industrialization

Heblich, S. and Trew, A. (2019) Banking and industrialization. Journal of the European Economic Association, 17(6), pp. 1753-1796. (doi: 10.1093/jeea/jvy037)

Abstract

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.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Trew, Professor Alex
• Authors: Heblich, S., and Trew, A.
• College/School: College of Social Sciences > Adam Smith Business School > Economics
• Journal Name: Journal of the European Economic Association
• Publisher: Oxford University Press
• ISSN: 1542-4766
• ISSN (Online): 1542-4774
• Published Online: 27 September 2018
• Copyright Holders: Copyright © 2019 The Authors
• First Published: First published in Banking and Industrialization 17:1753-1796
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher