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Can profitable arbitrage opportunities in the raw cotton market explain Britain’s continued preference for mule spinning?

Leunig, Tim (2002) Can profitable arbitrage opportunities in the raw cotton market explain Britain’s continued preference for mule spinning? Economic History Working Papers, 69/02. Department of Economic History, London School of Economics and Political Science, London, UK.

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Abstract

In an influential article Saxonhouse and Wright argued that the quality of local cotton was the single most important factor in explaining national preferences for ring or mule spinning. For Britain, they argue that mills using more flexible mule spindles could exploit arbitrage opportunities between different types of cotton in the Liverpool market, reducing the incentives to adopt rings. We use newly assembled price data to show that such cost-reducing arbitrage opportunities were small. We argue instead that the primary determinants of Lancashire’s technological choice were demand factors, but that the availability of good raw cotton did determine technological choice in emerging cotton industries.

Item Type: Monograph (Working Paper)
Official URL: http://www2.lse.ac.uk/economicHistory/workingPaper...
Additional Information: © 2002 Timothy Leunig. LSE has developed LSE Research Online so that users may access research output of the School. Copyright © and Moral Rights for the papers on this site are retained by the individual authors and/or other copyright owners. Users may download and/or print one copy of any article(s) in LSE Research Online to facilitate their private study or for non-commercial research. You may not engage in further distribution of the material or use it for any profit-making activities or any commercial gain. You may freely distribute the URL (http://eprints.lse.ac.uk) of the LSE Research Online website.
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
D History General and Old World > DA Great Britain
Sets: Departments > Economic History
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 69/02
Date Deposited: 23 Jun 2006
URL: http://eprints.lse.ac.uk/515/

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