Evolution of the Influence of Geography on the Location of Production in Spain (1930–2005)

In recent years, there has been a growing interest in the geographic aspects of development or the question of where economic activities take place. There is an extensive literature in urban economics, location theory and economic agglomeration. In fact, many economic activities are concentrated geographically and most people in advanced countries or regions live in densely populated metropolitan areas. The main issue is how to explain this concentration. Most of the references assume two approaches, first nature (Sachs 2000) and second nature (Krugman 1993, 1999; Venables 2003), which are also identified as Sachs’ (first nature) and Krugman’s approach (second nature). Krugman’s New Economic Geography abstracts from natural conditions. It states that agglomerations can be explained by second nature alone (i.e. by man-made agglomeration economies due to increasing returns to scale and transportation costs), which arises endogenously in the economic process.