Diverse paths to industrial development: evidence from late-nineteenth-century Canada

Throughout the nineteenth century, industrial development took an ever-widening diversity of forms reflecting local economic circumstances. A large collection of establishment-level micro-data from the 1871 Canadian Census of Manufacturing confirms that small, rural, seasonal, labour-intensive, and hand-powered industrial establishments had internal scale economies available for exploitation, they were technically efficient, and they made input employment decisions and technological choices well suited to the environment in which they operated. This evidence and a controlled comparison with northern US firms demonstrate that industrial development could be successful under surprisingly diverse conditions, as long as these conditions did not impede the exploitation of scale economies, technical efficiency, or technological choice.