This paper uses a natural experiment to estimate the causal effect of temporary trade protection on long-term economic development. I find that regions in the French Empire which became better protected from trade with the British for exogenous reasons during the Napoleonic Wars (1803-15) increased capacity in mechanized cotton spinning to a larger extent than regions which remained more exposed to trade. In the long-run, regions with exogenously higher spinning capacity had higher activity in mechanized cotton spinning and higher value-added per capita in industry.
Drivers of Fragmented Production Chains: Evidence from the 19th century
with Claudia Steinwender (MIT Sloan))
New version coming soon