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Putting Spanish steel on the map: The location of Spanish integrated steel, 1880 1936

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  • HOUPT, STEFAN

Abstract

By contrasting the optimal with the actual location of Spain s main production centre in Bilbao, we have tried to resolve the enigma that mislocation introduced an important welfare loss in Spain s industrialisation. This analysis considers the optimal location for integrated steel mills in Spain from their origins (1880s) until the Spanish Civil War (1936 39). The first part of this article introduces the relevant aspects for formalising a model, while Section 2 applies the methodology. The numerical results show how the major technical change the reduction of coal consumption affected each of the alternative sites. They also allow us to identify the overall optimum site , which was not Bilbao. Our final conclusions confirm that the actual centre of iron and steel production during the period considered was a second-best location. The cost in terms of direct welfare loss, in terms of captive markets and rent-seeking used to maintain this second-best solution, and the ultimate consequences of mislocation, point to an inefficiency which has changed the course of modern Spanish industrialisation.

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Bibliographic Info

Article provided by Cambridge University Press in its journal European Review of Economic History.

Volume (Year): 6 (2002)
Issue (Month): 02 (August)
Pages: 193-220

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Handle: RePEc:cup:ereveh:v:6:y:2002:i:02:p:193-220_00

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Cited by:
  1. Pedro Mendi & Róbert F. Veszteg, 2009. "Sustainability of collusion: evidence from the late 19th century basque iron and steel industry," Investigaciones Economicas, Fundación SEPI, vol. 33(3), pages 385-405, September.
  2. Tran Lam Anh Duong, 2011. "The Optimal Dynamic Infant Industry Protection in Joining a Free Trade Agreement: A Numerical Analysis of the Vietnamese Motorcycle Industry," Global COE Hi-Stat Discussion Paper Series gd11-191, Institute of Economic Research, Hitotsubashi University.

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