In most developing countries, firms tend to be small, use outdated production technologies, and produce for local markets. In rich countries, on the other hand, firms are generally large, use leading technologies, and operate in integrated national and global markets. This contrast raises the question: can a higher degree of market integration stimulate economic development? Our aim is to study the role of market integration for economic development from an empirical and theoretical perspective. We focus on Sweden's historical transformation from a poor country on the periphery of Europe to one of the richest countries in the world, during a period of national and global market integration. A significant role of infrastructure investment and integration in explaining this growth miracle was emphasised by contemporary economists such as Eli Heckscher. Even today, this is emphasised as central to economic development both in the academic literature and by aid institutions: the World Bank currently spends more on transport infrastructure in developing countries than on health and education combined. Despite this, our knowledge of whether infrastructure investment and market integration can contribute to economic development is limited. Our project combines new data and develops new theories to understand Sweden's growth spurt and more generally the relationship between market integration and economic development. We use new annual micro data on all Swedish factories' labour, capital use, and production 1740-1914. This rich data set is combined with geographical (GIS) data capturing the expansion of canals, railways, and roads. We also collect new data on trade flows: on an annual basis, we observe flows of people, mail, and goods between all railway stations along the network. Taken together, this unique material--which combines micro data on individual firms, detailed measures of local economies' access to markets, and intranational trade flows--provides new opportunities to study how market integration contributes to economic development.