Industrial development under institutional frailty: the development of the Mexican textile industry in the nineteenth century

In Mexico, as in other parts of the world, the introduction of modern transportation and communications brought about major changes in the production and distribution of goods and in firms' management and structure. Between 1880 and 1910, the Mexican textile sector was modernized through the efforts of entrepreneurial French immigrants from Barcelonnette, whose closely knit network enabled them to succeed in overcoming limitations in the Mexican institutional framework.

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ENFORCING PROPERTY RIGHTS THROUGH REPUTATION: MEXICO'S EARLY INDUSTRIALIZATION, 1878–1913

Maurer¹,

Sharma²

2001

J. Econ. Hist.

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Mexico's initial industrialization was based on firms that were “grouped”: that is, linked to other firms through close affiliations with a common bank. Most explanations for the prevalence of groups are based on increasing returns or missing formal capital markets. We propose a simpler explanation that better fits the facts of Mexican history. In the absence of secure property rights, tangible collateral could not credibly be offered to creditors; but there remained the possibility of using reputation as a form of intangible collateral. In such circumstances, firms had incentives to group together for purposes of mutual monitoring and insurance.

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Industrial development under institutional frailty: the development of the Mexican textile industry in the nineteenth century

Cited by 8 publications

References 11 publications

Premodern Manufacturing

Premodern Manufacturing

Networks and Entrepreneurship: The Modernization of the Textile Business in Porfirian Mexico

ENFORCING PROPERTY RIGHTS THROUGH REPUTATION: MEXICO'S EARLY INDUSTRIALIZATION, 1878–1913

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