Factory Location : Resistance to Technology Adoption and Local Institutions

This paper studies technology adoption and factory location in England during the Industrial Revolution. First, we document a negative relationship between industrialization in the 19th century and pre-industrial economic activities. Second, we show that while local self-governing institutions developed in commercially prominent cities, these cities failed to adopt the new industrial technologies during the 19th century. We argue that while these institutions were complementary to early modern economic growth, they were detrimental to industrialization. We hypothesize that because local self-governance led to the development of representative institutions, these facilitated collective action and enabled workers threatened by labor mechanization to resist technology adoption. Higher resistance to technology adoption, in turn, resulted in the relocation of economic activities away from traditional centers of production