Broadberry, Stephen and Gupta, Bishnupriya (2005) Cotton textiles and the great divergence: Lancashire, India and shifting competitive advantage, 1600-1850. Discussion Paper. Centre for Economic Policy Research (Great Britain), London.

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Abstract

The growth of cotton textile imports into Britain from India opened up new opportunities for import substitution as the new cloths, patterns and designs became increasingly fashionable. However, high silver wages in Britain as a result of high productivity in other tradable goods and services, meant that British producers of cotton textiles could not use labour-intensive Indian production methods. The growth in British labour productivity that resulted from the search for labour-saving technological progress meant that unit labour costs became lower than in India despite the much higher wages in Britain. However, the full effects of the rise in British productivity were delayed until after the Napoleonic Wars by increasing wage and raw cotton costs before supply adjusted to the major increase in demand for inputs. On balance, the effects of British protective measures were neutral.

Item Type:	Working or Discussion Paper (Discussion Paper)
Subjects:	H Social Sciences > HD Industries. Land use. Labor
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Cotton textile industry -- England -- Lancashire, Cotton textile industry -- India, Competition, Labor costs -- England -- Lancashire, Labor costs -- India
Series Name:	Discussion paper (Centre for Economic Policy Research (Great Britain))
Publisher:	Centre for Economic Policy Research (Great Britain)
Place of Publication:	London
Date:	August 2005
Number:	No.518
Number of Pages:	50
Status:	Not Peer Reviewed
Access rights to Published version:	Open Access
Funder:	Economic and Social Research Council (Great Britain) (ESRC)
Grant number:	R000239492 (ESRC)
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URI:	http://wrap.warwick.ac.uk/id/eprint/1708

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