View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Munich Personal RePEc Archive MPRA Munich Personal RePEc Archive Network preferences and the growth of the British cotton textile industry, c.1780-1914 Steven Toms University of Leeds 6 July 2017 Online at https://mpra.ub.uni-muenchen.de/80058/ MPRA Paper No. 80058, posted 8 July 2017 14:38 UTC Network preferences and the growth of the British cotton textile industry, c.1780-1914 By Steven Toms (University of Leeds) Preliminary draft, for presentation at Association of Business Historians Conference, Glasgow, June 2017. Keywords: Business networks, British cotton textile industry, innovation, finance, regions, entrepreneurship, mergers. JEL: L14, L26, O33, N24, N83 Correspondence details: Steven Toms Professor of Accounting, Leeds University Business School Room 2.09, Maurice Keyworth Building University of Leeds Leeds LS2 9JT Tel: 44(113)-3434456 Email:
[email protected] Word count: c.11,000 Abstract The paper considers the dual aspect of social networks in terms of 1) product innovators and developers and 2) the providers of finance. The growth of networks can be explained as a function of incumbents and entrants’ preferences to link with specific nodes defined according to the underlying duality. Such preferences can be used to explain network evolution and growth dynamics in the cotton textile industry, from being the first sector to develop in the industrial revolution through to its maturity. The network preference approach potentially explains several features of the long run industry life cycle: 1. The early combination of innovators with access to extensive credit networks, protected by entry barriers determined by pre-existing network structures, leading to lower capital costs for incumbents and rapid productivity growth, c.1780-1830.