Business creation and political turmoil: Ireland versus Scotland before 1900

Journal: Business History Review

Date: 2022

Author: Robin J. C. Adams, Gareth Campbell, Christopher Coyle, John D. Turner

Abstract:
What effect does political instability in the form of a potential secession from a political union have on business formation? Using newly collected data on business creation, we show that entrepreneurial activity in Ireland in the late nineteenth century was much lower than Scotland, and this divergence fluctuated over time. Several factors may have contributed to this, but we argue that political uncertainty about the prospect of a devolved government in Ireland played a role. The effects were most acute in the North of Ireland, the region that was most concerned by potential changes.

Link: Google Scholar

Background and Context

Historical Setting

In late 19th century Ireland, the Home Rule movement sought autonomy from the United Kingdom, creating political uncertainty particularly between 1870-1900.

Research Focus

The study examines how political instability from potential Irish Home Rule affected business creation by comparing company registrations in Ireland versus Scotland.

Methodology

Analysis of 6,995 newly registered companies between 1856-1900 using British parliamentary reports, comparing incorporation rates and examining regional variations in business creation.

Dramatic Decline in Irish Business Creation Relative to Scotland

Shows how Irish company registrations declined relative to Scotland over time
By 1900, Scotland had almost three times as many new companies registered as Ireland
Demonstrates the growing divergence between the two regions

Regional Distribution Shows Northern Ireland Most Affected

Illustrates how anti-Home Rule Northern Ireland saw greatest business decline
Shows regional variations in business creation across Ireland
Demonstrates stronger impact in areas most opposed to Home Rule

Sectoral Analysis Shows Widespread Impact Across Industries

Shows how different business sectors were affected
Demonstrates that decline occurred across multiple industries
Highlights particularly strong impact on manufacturing and textiles

Stock Market Volatility Peaks During Home Rule Bills

Shows spikes in market uncertainty during Home Rule Bills of 1886 and 1893
Demonstrates impact on existing business valuations
Illustrates market reaction to political uncertainty

Contribution and Implications

First comprehensive analysis linking political uncertainty to reduced business creation in 19th century Ireland
Demonstrates how regional variations in political attitudes affected economic development
Suggests earlier roots for Northern Ireland's industrial decline than previously considered

Data Sources

Business creation data from Table 1 showing company registrations 1856-1900
Regional distribution data from Table 2 showing sectoral breakdown by region
Newspaper mentions data from Figure 4 showing Home Rule article frequency
Stock market volatility data from Figure 7 showing market reactions
Sectoral analysis based on detailed breakdown in Table 2