Britannia Ruled the Waves

This paper uses new micro-level US data to re-examine productivity leadership in cotton spinning c. 1900. We find that output aggregation problems make the Census unreliable in this industry, and that Lancashire, not New England was the productivity leader for almost every type of yarn. This is true both for the operation of a given machinery type, and when comparing machinery typical in each country. Higher capital and labour productivity rates imply that Lancashire’s combination of a more favourable climate, external economies of scale and more experienced workers dominated the advantages that New England firms derived from greater scale.[...]