SMU SOE Seminar (February 29, 2024): Gaining Steam: Incumbent Switching and Entrant Leapfrogging

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ABSTRACT We examine the long transition from water to steam power in US manufacturing, exploring how early advantages can delay the adoption of new technologies. Using newly digitized Census of Manufactures manuscripts for 1850-1880, we show that as steam costs declined, mill activity grew faster in counties with less waterpower. This growth was driven by steam-powered entrants, as previously-waterpowered mills exited instead of switching technologies, suggesting technological lock-in. For identification, we leverage variation in US counties’ waterpower potential, due to interacting water flow and elevation changes. To quantify the delay in steam adoption from technological lock-in, we estimate a dynamic model of firm entry and steam adoption. Click here to view the CV.
		PRESENTER Anders Humlum The University of Chicago Booth School of Business
		RESEARCH FIELDS Technical Change Labor Economics
		DATE: 29 February 2024 (Thursday)
		TIME: 4pm - 5.30pm
		VENUE: Meeting Room 5.1, Level 5 School of Economics Singapore Management University 90 Stamford Road Singapore 178903