Why Firms Grow : The Roles of Institutions, Trade, and Technology during Swedish Industrialization
Author
Summary, in English
Industrialization and the emergence of a manufacturing sector are generally perceived as key drivers for countries to see economic growth and increases in living standards. Only 200 years ago, most countries were relatively poor and had similarly low living standards. With industrialization and the growth of manufacturing, primarily Western countries pulled ahead and noticed sustained increases in living standards. Eventually, this process led to a divergence in economic performance. While today high-income economies are characterized by relatively larger firms that use novel production techniques based on the latest scientific advances, firms in low-income countries generally remain small and are less efficient.
How did today’s high-income countries initially manage to start growing and industrializing? While existing explanations focus on the roles of, for example, institutions, trade, and technology, such aspects have generally not been analyzed at the level where economic growth occurred: the industrial firm. Consequently, understanding how (Western) firms managed to increase in size and productivity may also inform current debates.
This thesis analyzes the causes of industrialization at the firm level. It studies how (some) manufacturing establishments managed to start growing, adopted new technologies, and learned to organize themselves more efficiently in late nineteenth-century Sweden. As such, the thesis focuses on the formative years of the Swedish economy when the country developed from being one of the poorest on Europe’s periphery into one of the fastest-growing economies worldwide. To do so, the study leverages newly digitized data that cover in unique detail the yearly performance of Swedish manufacturing firms.
In four papers, the thesis shows how policies that generally have been perceived as key drivers of the industrialization process—e.g., general incorporation laws or tariff protection—enabled marginal establishments to grow, organize as factories, and adopt new technologies, such as steam power. Yet, state policy was no panacea as it (sometimes) negatively affected leading establishments. Using individual census data on the employment of individuals in Sweden, the USA, and Great Britain, the study also documents how industrialization led to further growth dynamics, primarily in the service sector. More broadly, this thesis shows how firm-level growth in manufacturing created an economic dynamism that would ultimately better the lives of people.
How did today’s high-income countries initially manage to start growing and industrializing? While existing explanations focus on the roles of, for example, institutions, trade, and technology, such aspects have generally not been analyzed at the level where economic growth occurred: the industrial firm. Consequently, understanding how (Western) firms managed to increase in size and productivity may also inform current debates.
This thesis analyzes the causes of industrialization at the firm level. It studies how (some) manufacturing establishments managed to start growing, adopted new technologies, and learned to organize themselves more efficiently in late nineteenth-century Sweden. As such, the thesis focuses on the formative years of the Swedish economy when the country developed from being one of the poorest on Europe’s periphery into one of the fastest-growing economies worldwide. To do so, the study leverages newly digitized data that cover in unique detail the yearly performance of Swedish manufacturing firms.
In four papers, the thesis shows how policies that generally have been perceived as key drivers of the industrialization process—e.g., general incorporation laws or tariff protection—enabled marginal establishments to grow, organize as factories, and adopt new technologies, such as steam power. Yet, state policy was no panacea as it (sometimes) negatively affected leading establishments. Using individual census data on the employment of individuals in Sweden, the USA, and Great Britain, the study also documents how industrialization led to further growth dynamics, primarily in the service sector. More broadly, this thesis shows how firm-level growth in manufacturing created an economic dynamism that would ultimately better the lives of people.
Department/s
Publishing year
2023-02-03
Language
English
Publication/Series
Lund Studies in Economic History
Issue
110
Full text
Document type
Dissertation
Publisher
Lund University (Media-Tryck)
Topic
- Economic History
Keywords
- Industrialization
- Firms
- 19th Century
- Institutions
- Trade
- Technology
- Growth
- Development
- Factory
- Corporations
- Steam Power
- Tariffs
- Employment Multiplier
- Services
- Causal Inference
- Sweden
- USA
- Great Britain
Status
Published
Supervisor
ISBN/ISSN/Other
- ISSN: 1400-4860
- ISBN: 978-91-87793-95-0
- ISBN: 978-91-87793-94-3
Defence date
24 February 2023
Defence time
13:15
Defence place
EC3:211
Opponent
- Markus Lampe (Professor)