Industrial agglomerations and wage gradients: the Spanish economy in the interwar period (?)
AbstractThe geographical distribution of Spanish industry shows today two interesting features. On the one hand, a high concentration, higher than what we can find in the majority of European countries. On the other hand, the coexistence of two industrial cities: Madrid and Barcelona. In Spain, the larger increases in the levels of concentration are to be found during the long period that goes from the middle of the 19th century to the Civil War (1936-1939). As for the geographical location of large industrial centers, the second half of the 19th century was dominated by the rising of Barcelona as the main center of industrial production in Spain. In those years, Barcelona got to concentrate a third of Spanish industrial output. However, the turning of the century marks a halt in this process, and Madrid begins then to increase its share in Spanish manufacturing, filling the gap gradually with the Catalan city. In this paper we suggest two explanatory hypothesis to these facts. On the one hand, we believe that the increase in the geographical concentration of Spanish industries along the period 1850-1935 is linked to the existence of scale economies in a context of increasing domestic market integration. On the other hand, we think that the initial development of Barcelona as the Spanish industrial capital and its subsequent loss of punch in front of other locations like Madrid, both the capital-city of the country and its geographical center, could be related, though not exclusively, with the changes in Spanish trade policy at the end of the 19th century. At this point in time, the nationalistic reaction after the loss of the remaining colonies, supposes the abandon of a liberal regime, characterized by a relative openness, and the adoption of a nationalistic model of development that breaks the former dynamics and imposes harsh restrictions in the international trade of goods and raw materials. The paper pretends also to provide 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) seminal paper, that is, the existence of regional nominal wage gradients and its transformation following changes in trade regimes. Hanson (1996, 1997, 1998) has analyzed in depth these effects in the case of the Mexican economy and has shown how trade reform has weakened the industrial belt around Mexico city, giving rise to new industrial centers in the north of the country. On the contrary, 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. To this aim, in the empirical analysis, we test the existence of a nominal wage gradient centered in Barcelona during the period 1914-1930. Our results indicate the existence of a wage gradient centered in Barcelona during the interwar period (1914-1930) and its weakening after 1925. The evidence on the genesis of a new wage gradient centered in Madrid is not conclusive.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Regional Science Association in its series ERSA conference papers with number ersa03p113.
Date of creation: Aug 2003
Date of revision:
Contact details of provider:
Postal: Welthandelsplatz 1, 1020 Vienna, Austria
Web page: http://www.ersa.org
Other versions of this item:
- Daniel Aurelio Tirado Fabregat & Jordi Pons Novell & Elisenda Paluzie Hernandez, 2003. "Industrial agglomerations and wage gradients: the Spanish economy in the interwar period," Working Papers in Economics 103, Universitat de Barcelona. Espai de Recerca en Economia.
- N63 - Economic History - - Manufacturing and Construction - - - Europe: Pre-1913
- R12 - Urban, Rural, Regional, Real Estate, and Transportation 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 - - - Empirical Studies of Trade
- F15 - International Economics - - Trade - - - Economic Integration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-29 (All new papers)
- NEP-GEO-2004-02-29 (Economic Geography)
- NEP-HIS-2004-02-29 (Business, Economic & Financial History)
- NEP-MAC-2004-02-29 (Macroeconomics)
- NEP-URE-2004-02-29 (Urban & Real Estate Economics)
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.:
- Raul Livas Elizondo & Paul Krugman, 1992.
"Trade Policy and the Third World Metropolis,"
NBER Working Papers
4238, National Bureau of Economic Research, Inc.
- 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, January.
- Gordon H. Hanson, 1994.
"Regional Adjustment to Trade Liberalization,"
NBER Working Papers
4713, National Bureau of Economic Research, Inc.
- 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.
- Keith Head & Thierry Mayer, 2004.
"The Empirics of Agglomeration and Trade,"
Sciences Po publications
info:hdl:2441/10191, Sciences Po.
- Henry Overman & Stephen Redding & Anthony J. Venables, 2001.
"The Economic Geography of Trade, Production, and Income: A Survey of Empirics,"
CEP Discussion Papers
dp0508, Centre for Economic Performance, LSE.
- 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.
- Paluzie i Hernandez, Elisenda, 1999.
"Trade policy and regional inequalities,"
ERSA conference papers
ersa99pa231, European Regional Science Association.
- 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.
- Donald R. Davis & David E. Weinstein, 1997. "Economic Geography and Regional Production Structure: An Empirical Investigation," Harvard Institute of Economic Research Working Papers 1802, Harvard - Institute of Economic Research.
- Donald R. Davis & David E. Weinstein, 1997. "Economic Geography and Reginal Production Structure: An Empirical Investigation," NBER Working Papers 6093, National Bureau of Economic Research, Inc.
- Donald R. Davis & David E. Weinstein, 1998. "Economic geography and regional production structure: an empirical investigation," Staff Reports 40, Federal Reserve Bank of New York.
- 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.
- J. Peter Neary, 2000.
"Of Hype and Hyperbolas - Introducing the new Economic Geography,"
200019, School Of Economics, University College Dublin.
- 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.
- Roses, Joan R. & Sanchez-Alonso, Blanca, 2004.
"Regional wage convergence in Spain 1850-1930,"
Explorations in Economic History,
Elsevier, vol. 41(4), pages 404-425, October.
- 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, January.
- Krugman, Paul, 1991.
"Increasing Returns and Economic Geography,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 483-99, June.
- Pérez, Concha Betrán, 1999. "Difusión y localización industrial en España durante el primer tercio del siglo XX," Revista de Historia Económica, Cambridge University Press, vol. 17(03), pages 663-696, December.
- Hanson, Gordon H, 1996.
"Localization Economies, Vertical Organization, and Trade,"
American Economic Review,
American Economic Association, vol. 86(5), pages 1266-78, December.
- Gordon H. Hanson, 1994. "Localization Economies, Vertical Organization and Trade," NBER Working Papers 4744, National Bureau of Economic Research, Inc.
- Diego Puga, 1996.
"The Rise and Fall of Regional Inequalities,"
CEP Discussion Papers
dp0314, Centre for Economic Performance, LSE.
- 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.
- Brian A'Hearn & Tony Venables, 2011.
"Internal Geography and External Trade: regional disparities in Italy, 1861-2011,"
Economics Series Working Papers
578, University of Oxford, Department of Economics.
- Brian A'Hearn & Anthony J. Venables, 2011. "Internal Geography and External Trade: regional disparities in Italy, 1861-2011," Quaderni di storia economica (Economic History Working Papers) 12, Bank of Italy, Economic Research and International Relations Area.
- A'Hearn, Brian & Venables, Anthony J, 2011. "Internal Geography and External Trade: regional disparities in Italy, 1861-2011," CEPR Discussion Papers 8655, C.E.P.R. Discussion Papers.
- 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.
- Rosa Sanchis-Guarner & Enrique Lopez-Bazo, 2006. "Are Skilled Workers More Attracted to Economic Agglomerations?," ERSA conference papers ersa06p120, European Regional Science Association.
- Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier).
If references are entirely missing, you can add them using this form.