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Abstract
This dissertation consists of two chapters. The first chapter studies the agglomeration effects resulting from the forced relocation of 600,000 rural Chinese to compact villages in 1950s British Malaya. I find that counties receiving more resettlement experienced persistently higher population densities and a greater share of Chinese, with increased internal migration over time. These areas saw a shift in employment from agricultural to non-agricultural sectors. Residents in the more resettled counties had higher incomes, particularly among local Chinese, while other ethnic groups benefit mainly through entering the non-agricultural sector. I estimate a spatial general equilibrium model with occupational choice, migration, and heterogeneous agglomeration forces across sectors and groups, exploiting the resettlement program as a population shifter. I find substantial barriers to productivity spillovers between different ethnic groups and a larger external economy for the non-agricultural sector.
In the second chapter, we examine how access to local waterpower delayed the transition from water to steam power in 19th-century US manufacturing, focusing on early users of mechanical power: lumber and flour mills. Digitizing Census of Manufactures manuscripts for 1850-1880, we show that as steam costs declined, manufacturing activity grew faster in counties with less waterpower potential. This growth was driven by steam powered entrants and agglomeration, as water powered incumbents faced barriers to switching technologies primarily from sunk costs. Despite substantial entry and exit, these switching barriers remained influential for aggregate steam adoption throughout the 19th century, as water power required lower fixed costs and therefore was attractive to relatively low productivity entrants. These entrants were later locked-in to water power, even if their productivity grew. Estimating a dynamic model of firm entry and steam adoption, we find that the interaction of switching barriers and high fixed costs is a quantitatively important drag on technology adoption.