Dynamics of the Textile Industry in Maranhão: Market Structures and Competitiveness (1880-1940)

Abstract

This article examines the trajectory of the textile industry in Maranhão, Brazil, between 1880 and 1940, focusing on its phases of implementation, expansion, and decline. Grounded in the market structure theories of Paolo Sylos Labini and Joan Robinson, the study analyzes how oligopolistic concentration, family management, and technological delays impacted regional competitiveness. The methodology integrates historical and microeconomic analysis, utilizing data on investments, production, and market dynamics.  Initially, the sector benefited from favorable external contexts, such as demand for local cotton and post-abolition policies that expanded labor availability. However, over time, it faced growing challenges due to competition from more industrialized regions, which adopted economies of scale and accelerated modernization. Family management, while ensuring continuity, constrained innovation and adaptation to market shifts. The oligopolistic structure, dominated by few firms, reduced competitiveness and discouraged new entrants, as indicated by concentration metrics.  The research reveals that low operational efficiency, coupled with difficulties in scaling productive capacity, rendered the sector vulnerable to crises. The conclusion emphasizes that industrial policies should prioritize local specificities, incentivize modernization, and strengthen productive networks to avoid stagnation cycles. Maranhão’s experience underscores the need to balance market concentration with economic dynamism to foster sustainable development in peripheral regions.