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Evolution of the influence of geography on the location of production in Spain (1930-2005)

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  • Chasco, Coro
  • López, Ana María

Abstract

In this paper, we investigate the relative importance of geographic features on the location of production in Spain. Specifically, we want to quantify how much of the spatial pattern of GDP can be attributed to only exoge-nous first nature elements (physical and political geography) and how much can be derived from endogenous second nature factors (man-made agglomeration economies). In order to disentangle both effects empiri-cally, and to learn how they are interrelated, we control for second nature. We use a methodology based on an analysis of variance (ANOVA), which is applied to a panel of 47 Spanish provinces in the period 1930-2005. We demonstrate that results can be biased if spatial autocorrelation and spatial heterogeneity, as well as multicollinearity and endogeneity, are not prop-erly taken into account. In the Spanish case, we detect strong spatial het-erogeneity in the form of two main clusters. As expected, gross second na-ture forces are more important than net natural advantages, though their effects range from about 55% in the hinterland to 80% in the coast.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 9580.

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Date of creation: 03 Feb 2008
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Handle: RePEc:pra:mprapa:9580

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Keywords: Agglomeration; Geography; Spatial Heterogeneity; Endogeneity; Spanish Regions;

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  1. Ades, Alberto F & Glaeser, Edward L, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(1), pages 195-227, February.
  2. John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers, Center for International Development at Harvard University 1, Center for International Development at Harvard University.
  3. Gallup, J.L. & Sachs, J.D. & Mullinger, A., 1999. "Geography and Economic Development," Papers, Chicago - Graduate School of Business 1, Chicago - Graduate School of Business.
  4. José María Mella Márquez & Coro Chasco Yrigoyen, 2004. "Urban growth and territorial dynamics in Spain (1985-2001): A spatial econometrics analysis," Urban/Regional, EconWPA 0411003, EconWPA.
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