Distance to the pre-industrial technological frontier and economic development

Abstract

This research explores the effects of the geographical distance to the pre-industrial technological frontier on economic development. It establishes theoretically and empirically that there exists a persistent non-monotonic effect of distance to the frontier on development. In particular, exploiting a novel measure of the travel time to the technological frontier and variations in its location during the pre-industrial era, it establishes a robust persistent U-shaped relation between the distance to the pre-industrial technological frontier and economic development. Moreover, it demonstrates that isolation from the frontier has had a positive cumulative effect on innovation and entrepreneurial activity levels, suggesting isolation may have fostered the emergence of a culture conducive to innovation, knowledge creation, and entrepreneurship. . nological sophistication in agriculture, communication, transport, military or industry have similar U-shaped relations with the distance to the pre-industrial technological frontier. Additionally, the analysis suggests that the U-shape is not capturing other forces behind comparative development. In particular, accounting for technological backwardness, european colonization, trade, local technological frontiers or population diversity does not alter the qualitative results.The second part of the empirical analysis explores the relation between the distance to the preindustrial technological frontier and population density in the years 1, 1000, 1500, and 1800CE. In particular, by exploiting variations in the location of the technological frontier in the Old World, the analysis accounts for country fixed effects, and thus for the potential confounding effect of invariant country-specific characteristics. Moreover, the analysis accounts for period and region-period fixed effects, as well as time varying pre-industrial country characteristics that may be associated with the change in the distance to the technological frontier. Specifically, the analysis accounts for colonial status, the change in caloric suitability, and the time since the Neolithic Revolution. In line with the theory, the analysis establishes the existence of a robust U-shaped relation between distance to the technological frontier and population density pre-1800CE.Moreover, the analysis explores the relation between changes in the distance to the pre-industrial technological frontier and its square, and changes in population density pre-1800CE, accounting for region, period, and region-period fixed effects, as well as changes in the number of years since a country transitioned to agriculture, caloric suitability, colonial status, and distances to local technological frontiers. The analysis further demonstrates the existence of a U-shaped relation between distance to the pre-industrial technological and population density. This result is robust to analyzing the growth of population density across various periods and frontiers, suggesting the results are not driven by unobserved characteristics of the country ...

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“…Columns 4-6 explore the potential confounding effect of an ethnicity's location relative to other ethnicities. In particular, relative isolation from other ethnic groups may affect inter-ethnic trade and conflict, as well as innovation (Ashraf et al, 2010;Özak, 2018). Thus, the analysis explores the potential effect of accounting for an ethnicity's level of pre-industrial isolation from all other ethnicities (i.e., its average pre-industrial distance to all other ethnicities), and its average distance to the closest 5 or 25 ethnic groups.…”

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