Entrepreneurs and business performance in nineteenth century France

Abstract

A popular explanation for the supposed 'delayed industrialisation' of the nineteenth century French economy has been the inappropriate attitudes and actions of the managerial classes and family firms. To address these claims we model the supply and demand for entrepreneurship and also management success. We analyse a data set of 244 nineteenth century French businessmen, showing that on the demand side textiles offered greater, and iron and steel less, than average opportunities. On the supply side, secondary and university education were negatively associated with starting a successful firm, as was a father already in business. Surprisingly, Protestantism made no difference to the chances of setting up a firm. In the business performance model, the longer the period the businessman was active, the greater the accumulation - not consistent with life-cycle models of saving. Second, those who started their own business, compared with entering an existing firm, left less wealth at death than they could have expected to acquire over a normal lifetime, other things being equal. Unlike formal education, training - mainly apprenticeship - was associated with greater wealth at death. The pace of wealth accumulation suggests a dynamic sector during the Second Empire, at least where larger businesses were concerned. 1. French 'retardation' and businessmen 'Delayed industrialisation' remains a central concern in French nineteenth century historiography. France's turbulent nineteenth century political history was not obviously a suitable background for heavy investment and the rapid diffusion of new technology. Revolutions in 1830, 1848 and 1871, together with disastrous wars at the beginning of the century and in 1870, were unlikely to encourage business confidence. Industrial productivity and living standards remained lower than those across the Channel throughout the period, though growth rates were similar (Crafts 1984). Incomes may have been distributed more equally in France but French industrial employees spent more hours working (O'Brien and Keyder 1978, p. 87). Wide 1 spread railway building only began in the early 1850s. The water wheel remained standard technology into the i86os, when charcoal smelting