IDEAS home Printed from https://ideas.repec.org/a/oup/cambje/v46y2022i1p219-249..html
   My bibliography  Save this article

Profitability of small- and medium-sized enterprises in Marshall’s time: sector and spatial heterogeneity in the nineteenth century

Author

Listed:
  • Robert J Bennett
  • Harry Smith
  • Piero Montebruno
  • Carry van Lieshout

Abstract

New data on profit heterogeneity of small- and medium-sized firms for 1861–81 in England and Wales are used to reinterpret Marshall's contemporary insights. Profit level differences are chiefly explained by location, mainly urbanisation effects. But profitability (profit per worker) is mainly explained by sectors, at both 1-digit and 5-digit level. Sector market opportunities reflected barriers to market entry which limited substitutability for the services of the professions, some manufacturing and maker-dealing industries. Localisation mainly reflected urban/rural differences, accessibility to railways and to a lesser extent waterways. Differences in firm-level organisation (measured by portfolio diversification and partnerships) were less significant for explaining profit heterogeneity than sector or localisation. Demographic effects such as an entrepreneur's age had little significance. Marshall's insight of convergence to mean industry-sector profitability, with localisation as a secondary influence, is confirmed, but there remain unexplained elements of heterogeneity indicating important roles of entrepreneurial agency.

Suggested Citation

  • Robert J Bennett & Harry Smith & Piero Montebruno & Carry van Lieshout, 2022. "Profitability of small- and medium-sized enterprises in Marshall’s time: sector and spatial heterogeneity in the nineteenth century," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 46(1), pages 219-249.
    • Handle: RePEc:oup:cambje:v:46:y:2022:i:1:p:219-249.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/cje/beab055
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    More about this item

    Keywords

    Profitability; Firm heterogeneity; Industry profit rates; Small and medium enterprises;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:cambje:v:46:y:2022:i:1:p:219-249.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/cje .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.