Railroad Expansion and Entrepreneurship: Evidence from Meiji Japan
AJRC Working Papers 02/ 2013 April 2013
34 Pages Posted: 26 Jul 2017
Date Written: April 2013
Railroads in Meiji Japan are credited with facilitating factor mobility as well as access to human and financial capital, but the impact on firms is unclear. Using a newly developed firm-level dataset and a difference-in-differences model that exploits the temporal and spatial variation of railroad expansion, I assess the relationship between railways and firm activity across Japan. Results indicate that railroad expansion corresponded with increased firm activity, particularly in manufacturing, although this effect is mitigated in less populous regions. These findings are consistent with industrial agglomeration in areas with larger markets and earlier development among both new and existing establishments.
Keywords: agglomeration, entrepreneurship, firm genealogy, late development
JEL Classification: L26, N75, O53
Suggested Citation: Suggested Citation