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Industrial agglomerations and wage gradients: the Spanish economy in the interwar period

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Author Info
Daniel Aurelio Tirado Fabregat
Jordi Pons Novell
Elisenda Paluzie Hernandez (Universitat de Barcelona)

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Abstract

This paper gives new evidence on the relationship between integration and industrial agglomeration in the presence of scale economies, by testing directly one of the predictions that can be derived from Krugman (1991), that is, the existence of regional nominal wage gradients and its transformation following changes in trade regimes. Our case study analyzes the effects of the substitution of an open economy by a closed economy regime, exactly the opposite process studied by Hanson (1996, 1997). In Spain, during the interwar period, protectionist policies would have favored the loss of centrality of the coastal location (Barcelona) and the relative rise of central locations (such as Madrid). Our results indicate the existence of a wage gradient centered in Barcelona during the interwar period (1914-1930) and its weakening after 1925.

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Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 103.

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Length: 33 pages
Date of creation: 2003
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Handle: RePEc:bar:bedcje:2003103

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Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
Web page: http://www.ere.ub.es
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Find related papers by JEL classification:
N63 - Economic History - - Manufacturing and Construction - - - Europe: Pre-1913
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
F15 - International Economics - - Trade - - - Economic Integration

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  1. Overman, Henry G. & Redding, Stephen J & Venables, Anthony J., 2001. "The Economic Geography of Trade Production and Income: A Survey of Empirics," CEPR Discussion Papers 2978, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. J. Peter Neary, 2001. "Of Hype and Hyperbolas: Introducing the New Economic Geography," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 536-561, June. [Downloadable!] (restricted)
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  3. Puga, Diego, 1999. "The rise and fall of regional inequalities," European Economic Review, Elsevier, vol. 43(2), pages 303-334, February. [Downloadable!] (restricted)
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  4. Hanson, Gordon H, 1997. "Increasing Returns, Trade and the Regional Structure of Wages," Economic Journal, Royal Economic Society, vol. 107(440), pages 113-33, January. [Downloadable!] (restricted)
  5. Hanson, Gordon H, 1996. "Localization Economies, Vertical Organization, and Trade," American Economic Review, American Economic Association, vol. 86(5), pages 1266-78, December. [Downloadable!] (restricted)
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  6. Combes, Pierre-Philippe & Overman, Henry G., 2003. "The Spatial Distribution of Economic Activities in the EU," CEPR Discussion Papers 3999, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  7. Joan R. Rosés & Blanca Sánchez-Alonso, 2002. "Regional Wage Convergence In Spain 1850-1930," Working Papers in Economic History wh025301, Universidad Carlos III, Departamento de Historia Económica e Instituciones. [Downloadable!]
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  8. Hanson, Gordon H., 1998. "Regional adjustment to trade liberalization," Regional Science and Urban Economics, Elsevier, vol. 28(4), pages 419-444, July. [Downloadable!] (restricted)
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  9. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, vol. 49(1), pages 137-150, April. [Downloadable!] (restricted)
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  10. Davis, Donald R. & Weinstein, David E., 1999. "Economic geography and regional production structure: An empirical investigation," European Economic Review, Elsevier, vol. 43(2), pages 379-407, February. [Downloadable!] (restricted)
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  11. Choi, E Kwan & Harrigan, James, 2004. "Handbook of International Trade," Staff General Research Papers 11375, Iowa State University, Department of Economics.
  12. Head, Charles Keith & Mayer, Thierry, 2003. "The Empirics of Agglomeration and Trade," CEPR Discussion Papers 3985, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  13. Kevin H. O'Rourke & Jeffrey G. Williamson, 2001. "Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650592, December.
  14. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
  15. Matthieu Crozet ; Pamina Koenig-Soubeyran, 2002. "Trade Liberalization and the Internal Geography of Countries," Working Papers 2002-37, Centre de Recherche en Economie et Statistique. [Downloadable!]
  16. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Rosa Sanchis-Guarner & Enrique Lopez-Bazo, 2006. "Are Skilled Workers More Attracted to Economic Agglomerations?," ERSA conference papers ersa06p120, European Regional Science Association. [Downloadable!]
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