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The internal impact of a customs union; Baden and the Zollverein

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  • Ploeckl, Florian

Abstract

Tariffs can affect the growth of states. But how do they affect regional growth within states? Using Baden's 1836 entry into the Zollverein, the customs union of German states, I investigate the internal impact of a change in tariffs. With a new data set of regional employment data I demonstrate that the Zollverein had a substantial positive effect. Two market access effects are shown, one follows the standard market access predictions and the second triggers the direct investment by Swiss entrepreneurs in German regions close to their home base. Furthermore occupational change within the crafts sector was shifting labour towards higher taxed occupations and towards the region close to Switzerland.

Suggested Citation

  • Ploeckl, Florian, 2013. "The internal impact of a customs union; Baden and the Zollverein," Explorations in Economic History, Elsevier, vol. 50(3), pages 387-404.
    • Handle: RePEc:eee:exehis:v:50:y:2013:i:3:p:387-404
    DOI: 10.1016/j.eeh.2013.05.001
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    References listed on IDEAS

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    1. Stephen J. Redding & Daniel M. Sturm, 2008. "The Costs of Remoteness: Evidence from German Division and Reunification," American Economic Review, American Economic Association, vol. 98(5), pages 1766-1797, December.
    2. O'Rourke, Kevin H, 2000. "Tariffs and Growth in the Late 19th Century," Economic Journal, Royal Economic Society, vol. 110(463), pages 456-483, April.
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    4. Wolf, Nikolaus, 2007. "Endowments vs. market potential: What explains the relocation of industry after the Polish reunification in 1918?," Explorations in Economic History, Elsevier, vol. 44(1), pages 22-42, January.
    5. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
    6. Rosã‰S, Joan R., 2003. "Why Isn't the Whole of Spain Industrialized? New Economic Geography and Early Industrialization, 1797–1910," The Journal of Economic History, Cambridge University Press, vol. 63(4), pages 995-1022, December.
    7. Florian Ploeckl, 2010. "The Zollverein and the Formation of a Customs Union," Oxford Economic and Social History Working Papers _084, University of Oxford, Department of Economics.
    8. Florian Ploeckl, 2008. "Borders, Market Size and Urban Growth, The Case of Saxon Towns and the Zollverein in the 19th Century," Working Papers 966, Economic Growth Center, Yale University.
    9. Florian Ploeckl, 2013. "Local convergence: Baden 1829-1847," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 61(2), pages 122-139, June.
    10. Florian Ploeckl, 2010. "The Zollverein and the Formation of a Customs Union," Oxford University Economic and Social History Series _084, Economics Group, Nuffield College, University of Oxford.
    11. Douglas A. Irwin, 2002. "Interpreting the Tariff–Growth Correlation of the Late 19th Century," American Economic Review, American Economic Association, vol. 92(2), pages 165-169, May.
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    Cited by:

    1. Johnson, Noel D. & Koyama, Mark, 2017. "States and economic growth: Capacity and constraints," Explorations in Economic History, Elsevier, vol. 64(C), pages 1-20.
    2. Alexander Donges & Felix Selgert, 2019. "Technology transfer via foreign patents in Germany, 1843–77," Economic History Review, Economic History Society, vol. 72(1), pages 182-208, February.
    3. Florian Ploeckl, 2015. "The Zollverein and the Sequence of a Customs Union," School of Economics and Public Policy Working Papers 2015-02, University of Adelaide, School of Economics and Public Policy.
    4. Dohmen, Martin, 2022. "Freedom of enterprise and economic development in the German industrial take-off," European Economic Review, Elsevier, vol. 148(C).
    5. Johnson, Noel, 2015. "Taxes, National Identity, and Nation Building: Evidence from France," MPRA Paper 63598, University Library of Munich, Germany.
    6. Keller, Wolfgang & Shiue, Carol, 2013. "The Trade Impact of the Zollverein," CEPR Discussion Papers 9387, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Customs union; Market access; Industrialization; Occupational upgrading;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N93 - Economic History - - Regional and Urban History - - - 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)

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