Factory Location: Resistance to Technology Adoption and Local Institutions

Résumé

This paper studies technology adoption and factory location in England during the Industrial Revolution. First, we document a negative relationship between industrialization in the 19th century and pre-industrial economic activities. Second, we show that while early representative institutions developed in commercially prominent cities, these cities failed to adopt the new industrial technologies during the 19th century. We argue that while representative institutions were complementary to early modern economic growth, these were detrimental to industrialization. Representative institutions contributed to creating local grass-rooted organizations that enabled workers threatened by labor mechanization to resist technology adoption. Higher resistance to technology adoption, in turn, resulted in the relocation of economic activities away from traditional centers of production.