Financing Invention During the Second Industrial Revolution: Cleveland, Ohio 1870-1920
NBER WORKING PAPER SERIES FINANCING INVENTION DURING THE SECOND INDUSTRIAL REVOLUTION: CLEVELAND, OHIO 1870-1920 Naomi R. Lamoreaux Margaret Levenstein Kenneth L. Sokoloff Working Paper 10923 http://www.nber.org/papers/w10923 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 November 2004 The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. © 2004 by Naomi R. Lamoreaux, Margaret Levenstein, and Kenneth L. Sokoloff. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Financing Invention During the Second Industrial Revolution: Cleveland, Ohio, 1870-1920 Naomi R. Lamoreaux, Margaret Levenstein, and Kenneth L. Sokoloff NBER Working Paper No. 10923 November 2004 JEL No. N2, N6, O3 ABSTRACT For those who think of Cleveland as a decaying rustbelt city, it may seem difficult to believe that this northern Ohio port was once a hotbed of high-tech startups, much like Silicon Valley today. During the late nineteenth and early twentieth centuries, Cleveland played a leading role in the development of a number of second-industrial-revolution industries, including electric light and power, steel, petroleum, chemicals, and automobiles. In an era when production and inventive activity were both increasingly capital-intensive, technologically creative individuals and firms required greater and greater amounts of funds to succeed. This paper explores how the city's leading inventors and technologically innovative firms obtained financing, and finds that formal institutions, such as banks and securities markets, played only a very limited role.
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