Pascali, Luigi (2014) The wind of change : maritime technology, trade and economic development. Working Paper. Coventry: University of Warwick. Department of Economics. Warwick economics research papers series (TWERPS), Volume 2014 (Number 1049). (Unpublished)

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Abstract

The 1870-1913 period marked the birth of the first era of trade globalization. How did this tremendous increase in trade affect economic development? This work isolates a causality channel by exploiting the fact that the steamship produced an asymmetric change in trade distances among countries. Before the invention of the steamship, trade routes depended on wind patterns. The introduction of the steamship in the shipping industry reduced shipping costs and time in a disproportionate manner across countries and trade routes. Using this source of variation and a completely novel set of data on shipping times, trade, and development that spans the great majority of the world between 1850 and 1900, I find that 1) the adoption of the steamship was the major reason for the first wave of trade globalization, 2) only a small number of countries that were characterized by more inclusive institutions benefited from globalization, and 3) globalization exerted a negative effect on both urbanization rates and economic development in most other countries.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HC Economic History and Conditions
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	International trade -- History -- 19th century, International trade -- History -- 20th century, Economic history -- 1750-1918, Steamboats, Globalization
Series Name:	Warwick economics research papers series (TWERPS)
Publisher:	University of Warwick. Department of Economics
Place of Publication:	Coventry
Official Date:	June 2014
Dates:	Date Event June 2014 Available
Volume:	Volume 2014
Number:	Number 1049
Number of Pages:	45
Institution:	University of Warwick
Status:	Not Peer Reviewed
Publication Status:	Unpublished
Access rights to Published version:	Open Access (Creative Commons)
Date of first compliant deposit:	28 July 2016
Date of first compliant Open Access:	28 July 2016

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