Date of Graduation

Spring 5-23-2026

Document Type

Thesis

Degree Name

Master of Science in International and Development Economics (MSIDEC)

College/School

College of Arts and Sciences

Department/Program

Economics

First Advisor

Jesse Anttila-Hughes

Abstract

Growth depends on the sophistication of what an economy can produce, but economies that have specialized more deeply depend on the market access that sustains it. I test whether this dependence makes complex economies more vulnerable when access is disrupted, computing the Economic Complexity Index (ECI) from firm-level records in the U.S. Census of Manufactures (1850--1880) and using the Panic of 1873 as a natural experiment to measure county-level market access shocks from railroad bond defaults following Dutta (2024) and Donaldson and Hornbeck (2016). ECI predicts production and employment growth across all three decade windows, with the association strengthening as industrialization deepens. A one standard deviation increase in ECI is associated with approximately 0.4 additional log points of production growth in the 1870--80 window, roughly 49\% more production. The interaction between ECI and the market access shock is positive and significant, meaning higher-complexity counties experience larger production losses from the same shock, consistent with complex counties serving thin, dispersed markets where premium pricing depends on sustained access. Omaha, Nebraska (ECI 1.61) and Allen County, Ohio (ECI 0.60), one standard deviation apart in complexity, experience nearly identical shocks, yet Omaha loses approximately 30\% of its production to Allen County's 8\%, eroding 68\% of Omaha's growth advantage. An event study shows no pre-trends, supporting exogeneity, and the post-treatment coefficient indicates that losing market access eroded productive sophistication itself.

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