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The Location of the UK Cotton Textiles Industry in 1838: A Quantitative Analysis

Published online by Cambridge University Press:  27 November 2014

Nicholas Crafts
Professor, Department of Economics, University of Warwick, CV4 7AL Coventry United Kingdom. E-mail:
Nikolaus Wolf
Professor, Department of Economics, Humboldt University Berlin, Spandauer Strasse 1, 10178 Berlin Germany. E-mail:


We examine the geography of cotton textiles in Britain in 1838 to test claims about why the industry came to be so heavily concentrated in Lancashire. Our analysis considers both first and second nature aspects of geography including the availability of water power, humidity, coal prices, market access, and sunk costs. We show that some of these characteristics have substantial explanatory power. Moreover, we exploit the change from water to steam power to show that the persistent effect of first nature characteristics on industry location can be explained by a combination of sunk costs and agglomeration effects.

Copyright © The Economic History Association 2014 

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We are grateful for help with data and useful discussions to Bruce Campbell, Tom Devine, James Dowey, Paul Laxton, Tim Leunig, John Lyons, Peter Solar, and Cormac O'Grada, and for suggestions from seminar participants at LSE, Humboldt, Southern Denmark, and Venice. Earlier versions were presented to the European Historical Economics Society Conference in Dublin, 2011 and the Economic History Society Conference at Oxford, 2012 and in each case we received very useful comments. Ryan Weldzius, Volker Daniel, Thilo Huning, Lasse Stötzer, and Felix Kersting provided excellent research support. The usual disclaimer applies.



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