Productivity, Extent of Markets, and Manufacturing in the Late Antebellum South and Midwest

Abstract

This article uses the Bateman-Weiss samples of manufacturing firms from 1850 and 1860 to estimate the labor and total factor productivity of southern and midwestern manufacturing industries in the late antebellum period. The results indicate rapid growth in productivity, especially in the South. The article also demonstrates a positive association between measured productivity, firm size, and urbanization. Differences in manufacturing performance between the South and the Midwest are shown to be crucially dependent on the extent of markets within the two regions.