Portage and Path Dependence.
We examine portage sites in the U.S. South, Mid-Atlantic, and Midwest, including those on thefall line, a geomorphological feature in the southeastern U.S. marking the final rapids on rivers before the ocean. Historically, waterborne transport of goods required portage around the falls at these points, while some falls provided water power during early industrialization. These factors attracted commerce and manufacturing. Although these original advantages have long since been made obsolete, we document the continuing importance of these portage sites over time. We interpret these results as path dependence and contrast explanations based on sunk costs interacting with decreasing versus increasing returns to scale.
Associate Professor of Economics, Booth School of Business, University of Chicago. Postal address: 5807 South Woodlawn Avenue, Chicago, IL 60637. bleakley@uchicago.edu.
Hoyt
H
Bleakley
Jeffrey
J
Lin
coordination problem; economic geography; fall line; history dependence; initial conditions