Information and Innovation: Evidence From Railroad Expansion in the Nineteenth Century
Citations
Abstract
I study how access to information shapes invention by exploiting the staggered expansion of the U.S. railroad network and the mail it carried between 1840 and 1900. Using a new dataset that links the railroad mail routes recorded by the U.S. Post Office Department to the underlying rail network, I find that counties gaining railroad access produced about eleven percent more patents over the following five years than comparable counties without it, and that the gains were larger where mail service was more frequent and more extensive. I find no improvement, on average, in patent quality, though patent quality declined in counties without prior water access and rose where waterways already existed. Using large-language-model embeddings of patent text, I further show that connected counties’ patents grew more similar in content, and more so to those of ordinary counties than to those of the established innovation centers. The patenting advantage widened as the postal reforms of 1845 to 1863 lowered the cost of mailing, and patenting fell where the Post Office discontinued Southern mail service during the Civil War. Together, these findings point to the flow of information as a channel through which railroad expansion raised patenting in the counties the mail reached.
