Technical Change, Non-Tariff Trade Barriers and the Development of the Italian Locomotives Industry, 1850-1913

In this paper we examine the dynamics of technical change in the Italian locomotive industry in the period 1850-1913. From an historical point of view, the case of the Italian locomotive industry presents a major point of interest: it was one of the few relatively sophisticated “high-tech” industries in which Italy, a latecomer country, was able to firmly set foot before 1913. Using technical data on the performance of different vintages of locomotives, we construct a new aggregate index of technical change for the industry. Overall the most successful phase for the Italian locomotive industry seems to be period 1895-1913 characterized by a very rapid technical progress and by the effective consolidation of the technological capabilities in this area of two major firms: Breda and Ansaldo. Our re-assessment reveals the critical role of non-tariff trade barriers in the development of this industry.