Three essays on French colonial trade

Abstract

This thesis consists of three empirical papers on French colonial trade patterns: Chapter 1 presents an original database on colonial trade statistics from French archives. Its main purpose is to describe the construction of this dataset and to present some stylized facts about the dynamic and trend of French sectoral trade with French and non-French colonies and well as with other sovereign countries for the period starting 1880 until the eve of the WWI. The statistics highlight a common stylized fact regarding French trade with French colonies. In particular, we found that French trade with its colonies was mainly based on imports of primary products and exports of manufactured goods meaning that the Empire was used as the main dispenser of French exports and their main provider of natural resources. Statistics also emphasize that the event of colonization was followed by an increase in trade between France and its own colonies, while colonization from Britain and other metropolis did not impact trade between France and British/ other colonies. The chapter finally reveals that trade with French colonies was unbalanced and unidirectional, they do not reveal any advantage in favor of those colonies. Chapter 2 investigates how the colonial strategy through the settlement decision affected French trade patterns. Using a gravity model, results show that French colonies with more European settlements traded more with France, whereas the opposite is true for other colonies. The chapter provides a framework to discuss different factors through which European settlements might have affected the French trade pattern with colonies, namely, the establishment of formal institutions, the use of common language with Europeans and the duration of colonization. We find that better formal institutions brought by European settlements had a negative impact on trade with French colonies, while they promoted French trade with British colonies. These results are consistent with the extractive nature of French trade relations with its colonies. As for the use of common language and the duration of colonization, the stronger those ties the higher the overall French trade with French colonies but the lower French trade with other colonies Finally in the last chapter we investigate the relation between the type of goods colonies exported to France and those economies’ later development. A common explanation for the export-growth nexus is the quality of institutions established in those colonies during the colonial period. In order to investigate the impact of colonial trade on current growth through the mediation of institutions, we apply the Partial Least Squares Structural Equation Modelling. With this method we are able to simultaneously derive the relative importance of trade and of institutions on growth, while taking into account multicollinearity between the variables, their measurements errors and small sample size issues. The results suggest an important joint role for both trade and institutions in determining economic development in the long run. In particular French colonies who exported raw material developed extractive institutions, which negatively affected development today, while those who exported manufactured goods experience better economic performance today. Among British and other colonies, however, higher exports of both raw materials and of manufactured goods to France are associated with better institutions, which lead to better economic performance in the long-run.