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Agglomeration and labour productivity in Spain over the long term

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Author Info

  • Julio Martínez-Galarraga

    (University of Barcelona, Barcelona, Spain)

  • Elisenda Paluzie

    (CAEPS, University of Barcelona, Barcelona, Spain)

  • Jordi Pons

    (CAEPS, University of Barcelona, Barcelona, Spain)

  • Daniel A. Tirado-Fabregat

    ()
    (University of Barcelona, Barcelona, Spain & epartament d’Història i Institucions Econòmiques, Universitat de Barcelona, Diagonal 690, 08034 Barcelona, Spain)

Abstract

This paper analyses the relationship between spatial density of economic activity and interregional differences in the productivity of industrial labour in Spain during the period 1860–1999. In the spirit of Ciccone and Hall (Am Econ Rev 86:54–70, 1996) and Ciccone (Eur Econ Rev 46:213–227, 2002), we analyse the evolution of this relationship over the long term in Spain. Using data on the period 1860–1999 we show the existence of an agglomeration effect linking the density of economic activity with labour productivity in the industry. This effect was present since the beginning of the industrialisation process in the middle of the nineteenth century but has been decreasing over time. Our results show that doubling employment density raises average labour productivity in the industrial sector by between 3 and 5% in all periods analysed, with the exception of the last segment from the twentieth century. Hence, we find significant evidence of agglomeration effects. However, these effects seem to have been falling sharply from the mid-nineteenth century until late in the twentieth century, and there appears to be no positive evidence of agglomeration effects in industry in the period 1985–1999. This result could be explained by an important increase in the congestion effects in large industrial metropolitan areas that would have compensated the centripetal or agglomeration forces at work. Furthermore, this result is also consistent with the evidence of a dispersion of industrial activity in Spain during the last decades.

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Bibliographic Info

Article provided by Association Française de Cliométrie (AFC) in its journal Cliometrica, Journal of Historical Economics and Econometric History.

Volume (Year): 2 (2008)
Issue (Month): 3 (October)
Pages: 195-212

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Handle: RePEc:afc:cliome:v:2:y:2008:i:3:p:195-212

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Related research

Keywords: Agglomeration economies; Regional disparities; Spanish economic history;

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References

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  1. Prados de la Escosura Leandro, 2003. "El progreso económico de España (1850-2000)," Books, Fundacion BBVA / BBVA Foundation, edition 1, number 201136.
  2. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119, October.
  3. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  4. Elisenda Paluzie Hernandez & Jordi Pons Novell & Daniel Aurelio Tirado Fabregat, 2000. "Regional integration and specialisation patterns in Spain," Working Papers in Economics 62, Universitat de Barcelona. Espai de Recerca en Economia.
  5. Diego Puga, 1996. "The Rise and Fall of Regional Inequalities," CEP Discussion Papers dp0314, Centre for Economic Performance, LSE.
  6. J. A. Hausman, 1976. "Specification Tests in Econometrics," Working papers 185, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
  8. Daniel A. Tirado & Elisenda Paluzie & Jordi Pons, 2002. "Economic integration and industrial location: the case of Spain before World War I," Journal of Economic Geography, Oxford University Press, vol. 2(3), pages 343-363, July.
  9. Antonio Ciccone, 1998. "Agglomeration-effects in Europe," Economics Working Papers 499, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1999.
  10. Nicholas Crafts & Abay Mulatu, 2005. "What explains the location of industry in Britain, 1871–1931?," Journal of Economic Geography, Oxford University Press, vol. 5(4), pages 499-518, August.
  11. Kim, Sukkoo, 1998. "Economic Integration and Convergence: U.S. Regions, 1840–1987," The Journal of Economic History, Cambridge University Press, vol. 58(03), pages 659-683, September.
  12. Frank Geary & Tom Stark, 2002. "Examining Ireland"s Post--famine Economic Growth Performance," Economic Journal, Royal Economic Society, vol. 112(482), pages 919-935, October.
  13. Ros S, Joan R., 2003. "Why Isn't the Whole of Spain Industrialized? New Economic Geography and Early Industrialization, 1797 1910," The Journal of Economic History, Cambridge University Press, vol. 63(04), pages 995-1022, December.
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Citations

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Cited by:
  1. Joan R. Rosés & Daniel A. Tirado & Julio Martínez-Galarraga, 2010. "The long-term patterns of regional income inequality in Spain (1860-2000)," Working Papers in Economic History wp10-08, Universidad Carlos III, Departamento de Historia Económica e Instituciones.
  2. María Ayuda & Fernando Collantes & Vicente Pinilla, 2010. "From locational fundamentals to increasing returns: the spatial concentration of population in Spain, 1787–2000," Journal of Geographical Systems, Springer, vol. 12(1), pages 25-50, March.
  3. Rosés, Joan Ramón & Martínez-Galarraga, Julio & Tirado, Daniel A., 2010. "The upswing of regional income inequality in Spain (1860-1930)," Explorations in Economic History, Elsevier, vol. 47(2), pages 244-257, April.
  4. Holl, Adelheid, 2013. "Firm location and productivity in Spain," Investigaciones Regionales, Asociación Española de Ciencia Regional, issue 25, pages 27-42.
  5. Rafael González-Val & Daniel A. Tirado Fabregat & Elisabet Viladecans-Marsal, 2013. "Market potential and city growth : Spain 1860-1960," Working Papers in Economic History wp13-04, Universidad Carlos III, Departamento de Historia Económica e Instituciones.
  6. Elisenda Paluzie & Jordi Pons & Javier Silvestre & Daniel Tirado, 2009. "Migrants and market potential in Spain over the twentieth century: a test of the new economic geography," Spanish Economic Review, Springer, vol. 11(4), pages 243-265, December.
  7. Pierre-Philippe Combes & Miren Lafourcade & Jacques-François Thisse & Jean-Claude Toutain, 2008. "The Rise And Fall Of Spatial Inequalities In France: A Long-Run Perspective," PSE Working Papers halshs-00349293, HAL.
  8. Betty Agnani & Henry Aray, . "Testing for Political Effects on Total Factor Productivity," ThE Papers 09/13, Department of Economic Theory and Economic History of the University of Granada..
  9. repec:hal:wpaper:halshs-00586214 is not listed on IDEAS
  10. repec:hal:wpaper:halshs-00349293 is not listed on IDEAS

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