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Trade policy and industrial development: iron and steel in a small open economy, 1870−1913

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  • Kris Inwood
  • Ian Keay

Abstract

In this paper we argue that effective tariff protection associated with the 1879 National Policy and the 1887 Tupper tariffs triggered investment in new, technologically advanced blast furnaces that were capable of accommodating rapid output expansion. This conclusion is based on an appreciation of the timing of late nineteenth‐century investments in Canada and their connection to changes in government policy and other demand determinants. In our empirical investigation we use new information on westbound transatlantic freight rates, intra‐continental transport costs, and furnace‐specific micro‐data, and we acknowledge the endogenous relationships linking investment to domestic demand, labour costs, and tariffs. Politique commerciale et développement industriel : fer et acier dans une petite économie ouverte, 1870–1913. Dans ce texte, les auteurs suggèrent que la protection tarifaire effective, associée à la Politique Nationale de 1879 et aux tarifs de Tupper de 1887, ont déclenché des investissements dans de nouveaux hauts fourneaux technologiquement sophistiqués capables de s'ajuster à l'expansion rapide des taux de production. Cette conclusion est fondée sur une appréciation du moment des investissements au Canada à la fin du 19ème siècle, et de leur connexion aux changements dans la politique gouvernementale, et aux autres déterminants de la demande. Cette enquête empirique utilise des renseignements inédits sur les taux de fret du transport transatlantique vers l'ouest, les coûts de transport intracontinental, et des micro‐données sur les hauts fourneaux. On reconnaît les relations endogènes entre l'investissement, et la demande domestique, les coûts du travail, ainsi que les tarifs.

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  • Kris Inwood & Ian Keay, 2013. "Trade policy and industrial development: iron and steel in a small open economy, 1870−1913," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(4), pages 1265-1294, November.
  • Handle: RePEc:wly:canjec:v:46:y:2013:i:4:p:1265-1294
    DOI: 10.1111/caje.12048
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    Cited by:

    1. Nathaniel Lane, 2020. "The New Empirics of Industrial Policy," Journal of Industry, Competition and Trade, Springer, vol. 20(2), pages 209-234, June.
    2. Patrick Alexander & Ian Keay, 2017. "The Welfare Effects of Protection: A General Equilibrium Analysis of Canada’s National Policy," Staff Working Papers 17-18, Bank of Canada.
    3. Brian D. Varian, 2024. "Market integration and a lower-productivity economy: the case of Australian federation and Queensland’s manufacturing sector, 1897–1906," CEH Discussion Papers 06, Centre for Economic History, Research School of Economics, Australian National University.
    4. Ian Keay, 2019. "Protection for maturing industries: Evidence from Canadian trade patterns and trade policy, 18701913," Canadian Journal of Economics, Canadian Economics Association, vol. 52(4), pages 1464-1496, November.
    5. Gillian C. Hamilton & Ian Keay & Frank D. Lewis, 2017. "Contributions to Canadian economic history: The last 30 years," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(5), pages 1632-1657, December.
    6. Alexander, Patrick D. & Keay, Ian, 2019. "Responding to the First Era of Globalization: Canadian Trade Policy, 1870–1913," The Journal of Economic History, Cambridge University Press, vol. 79(3), pages 826-861, September.
    7. Donn L Feir & Rob Gillezeau & Maggie E C Jones, 2024. "The Slaughter of the Bison and Reversal of Fortunes on the Great Plains," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(3), pages 1634-1670.
    8. Lane, Nathaniel, 2016. "Manufacturing Revolutions: Industrial Policy and Industrialization in South Korea," SocArXiv 6tqax, Center for Open Science.
    9. Alexander, Patrick D. & Keay, Ian, 2018. "A general equilibrium analysis of Canada’s national policy," Explorations in Economic History, Elsevier, vol. 68(C), pages 1-15.
    10. Harris, Richard & Keay, Ian & Lewis, Frank, 2015. "Protecting infant industries: Canadian manufacturing and the national policy, 1870–1913," Explorations in Economic History, Elsevier, vol. 56(C), pages 15-31.

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    JEL classification:

    • N71 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: Pre-1913

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