Logistics, market size, and giant plants in the early twentieth century: a global view

The businesses of developed Europe—transporting freight by a more advantageous mix of ships, trains, and horses—encountered logistic barriers to trade lower than those in the sparsely populated United States. Economically integrated, compact northwest Europe was a multinational market space larger than the United States, and, arguably, as open to interstate commerce as the contemporary American domestic market. By the early twentieth century, the First European Integration had enabled its manufacturers to build more than half the world’s giant plants—many more than in the United States—as variously required by factor endowments, consumer demand, and scale economies.