The Roots of the Industrial Revolution – Institutions or (Socially Embedded) Technological Know-How?

The Roots of the Industrial Revolution – Institutions or (Socially Embedded) Technological Know-How?

Carles Boix Princeton University – Department of Politics and Woodrow Wilson School of Public and International Affairs

Scott F. Abramson Independent
EPSA 2013 Annual General Conference Paper 32A

We reassess the literature of growth by looking at the evolution of the European economy from around 1200 to 1900. Employing a comprehensive dataset for the European continent that includes geographic and climate features (1200-1800), urbanization data (1200-1800), per capita income data in the second half of the 19th century, location of proto-industrial centers (textile and metal sectors from 1300 to the Industrial Revolution), political borders and political institutions, we estimate the geographic, economic and political covariates of urbanization (commonly used as a proxy for per capita income) and 19th-century per capita income. Taking an instrumental variables approach, exploiting random climatic variation across time and space in the propensity of territory to support large, urban, populations, we show that the process of economic take-off (and of a growing economic divergence across the European continent) was caused by the emergence and growth of cities and urban clusters in an European north-south corridor that broadly runs from southern England to northern Italy. In contrast to previous findings in the institutionalist literature, we then show that fortunes of parliamentary institutions in early modern Europe played a small part in the success of the industrial revolution and the distribution of income across the continent in late 19th century. Rather, industrialization took place in those territories that had a strong proto-industrial base, often regardless of the absence of executive constraints (in the two centuries preceding the industrial revolution).

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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