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Capital Immobilities and Industrial Development: A Comparative Study of Brazil, Mexico, and the United States
Working paper
Stephen Haber
November 1994 |
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The argument is demonstrated through an analysis of the financing and development of the cotton textile industry in three countries Brazil, Mexico, and the United States during their early periods of industrial development. The paper first compares the institutional history of financial intermediaries and textile mill financing in the four countries during the period 1840 to 1930. The paper then assesses changes in the size and structure of each country’s textile industry in light of their histories of industrial finance. It presents data sets on industrial structure (measured both as four firm concentration ratios and Herfindahl indices) covering the period 1840-1930. This section of the paper also develops a counter-factual model to estimate the loss to Mexico of its repressive financial market regulatory policies.
The paper concentrates on the cotton textile industry because it was the most important industry in Brazil and Mexico during the period under consideration. In addition, the cotton textile industry should be characterized by near-perfect competition because of the high degree of divisibility of capital, small minimum efficient scales, and lack of legal or technological barriers to entry. High levels of concentration can therefore easily be tied to differential access to capital. |
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