IDEAS home Printed from https://ideas.repec.org/p/ahe/dtaehe/1409.html
   My bibliography  Save this paper

Market Potential and Regional Economic Growth in Spain, 1860-1930

Author

Listed:
  • Julio Martínez-Galarraga

    (Universitat de València,València,Spain)

  • Daniel A. Tirado-Fabregat

    (Universitat de València,València,Spain)

  • Rafael González-Val

    (Universidad de Zaragoza, Zaragoza, Spain)

Abstract

In this paper we employ parametric and nonparametric techniques to analyse the effect of the changes registered on regional market potential on the growth of Spanish regions during the period 1860-1930. The study of the Spanish experience during these years conforms a case study that allows analyzing whether the construction of new transport infrastructure, as well as the changes in trade policy, that affected the relative market potential of the Spanish regions, ended up shaping regional growth trajectories. In order to carry out the analysis we make use of new evidence on regional inequality patterns in the long term based on recent estimations of per capita GDP for NUTS III Spanish regions (provinces) and an a la Harris measure of regional market potential that takes into account the economic distance between territories according to the changes registered in transport networks, the variations in the actual transport costs and the tariff policy followed over the period. Our results show a clear positive influence of market potential on regional economic growth, particularly along the years 1900-1930.

Suggested Citation

  • Julio Martínez-Galarraga & Daniel A. Tirado-Fabregat & Rafael González-Val, 2014. "Market Potential and Regional Economic Growth in Spain, 1860-1930," Documentos de Trabajo (DT-AEHE) 1409, Asociación Española de Historia Económica.
  • Handle: RePEc:ahe:dtaehe:1409
    as

    Download full text from publisher

    File URL: http://www.aehe.es/wp-content/uploads/2015/04/dt-aehe-1409.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stephen J. Redding, 2010. "The Empirics Of New Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 297-311, February.
    2. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
    3. Duncan Black & Vernon Henderson, 2003. "Urban evolution in the USA," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 343-372, October.
    4. Matthieu Crozet, 2004. "Do migrants follow market potentials? An estimation of a new economic geography model," Journal of Economic Geography, Oxford University Press, vol. 4(4), pages 439-458, August.
    5. 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.
    6. Nicholas Crafts & Abay Mulatu, 2005. "What explains the location of industry in Britain, 1871–1931?," Journal of Economic Geography, Oxford University Press, vol. 5(4), pages 499-518, August.
    7. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
    8. Yannis M. Ioannides & Henry G. Overman, 2004. "Spatial evolution of the US urban system," Journal of Economic Geography, Oxford University Press, vol. 4(2), pages 131-156, April.
    9. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    10. Head, Keith & Mayer, Thierry, 2006. "Regional wage and employment responses to market potential in the EU," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 573-594, September.
    11. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
    12. 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.
    13. Crafts, Nicholas & Mulatu, Abay, 2006. "How Did the Location of Industry Respond to Falling Transport Costs in Britain Before World War I?," The Journal of Economic History, Cambridge University Press, vol. 66(3), pages 575-607, September.
    14. Combes, Pierre-Philippe & Lafourcade, Miren & Thisse, Jacques-François & Toutain, Jean-Claude, 2011. "The rise and fall of spatial inequalities in France: A long-run perspective," Explorations in Economic History, Elsevier, vol. 48(2), pages 243-271, April.
    15. 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.
    16. Redding, Stephen & Venables, Anthony J., 2004. "Economic geography and international inequality," Journal of International Economics, Elsevier, vol. 62(1), pages 53-82, January.
    17. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    18. Davis, Donald R. & Weinstein, David E., 2003. "Market access, economic geography and comparative advantage: an empirical test," Journal of International Economics, Elsevier, vol. 59(1), pages 1-23, January.
    19. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
      • Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence," Papers 645, Yale - Economic Growth Center.
      • Barro, Robert J. & Sala-i-Martin, Xavier, 1992. "Convergence," Scholarly Articles 3451299, Harvard University Department of Economics.
    20. Daniel A. Tirado & Elisenda Paluzie & Jordi Pons, 2002. "Economic integration and industrial location: the case of Spain before World War I," Journal of Economic Geography, Oxford University Press, vol. 2(3), pages 343-363, July.
    21. 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.
    22. Diego Puga, 2002. "European regional policies in light of recent location theories," Journal of Economic Geography, Oxford University Press, vol. 2(4), pages 373-406, October.
    23. Pierre-Philippe Combes & Thierry Mayer & Jacques-François Thisse, 2008. "Economic Geography: The Integration of Regions and Nations," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00311000, HAL.
    24. Miren Lafourcade & Jacques-François Thisse, 2008. "New economic geography: A guide to transport analysis," Working Papers halshs-00586878, HAL.
    25. Prados de la Escosura, Leandro, 2000. "International Comparisons of Real Product, 1820-1990: An Alternative Data Set," Explorations in Economic History, Elsevier, vol. 37(1), pages 1-41, January.
    26. Rosés, Joan Ramón & Martínez-Galarraga, Julio & Tirado, Daniel A., 2010. "The upswing of regional income inequality in Spain (1860-1930)," Explorations in Economic History, Elsevier, vol. 47(2), pages 244-257, April.
    27. Henderson, J. Vernon & Wang, Hyoung Gun, 2007. "Urbanization and city growth: The role of institutions," Regional Science and Urban Economics, Elsevier, vol. 37(3), pages 283-313, May.
    28. Tena Junguito, Antonio, 1998. "Un nuevo perfil del proteccionismo español durante la Restauración 1875-1930," IFCS - Working Papers in Economic History.WH dh981902, Universidad Carlos III de Madrid. Instituto Figuerola.
    29. Hanson, Gordon H, 1997. "Increasing Returns, Trade and the Regional Structure of Wages," Economic Journal, Royal Economic Society, vol. 107(440), pages 113-133, January.
    30. 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.
    31. Jordi Pons & Elisenda Paluzie & Javier Silvestre & Daniel A. Tirado, 2007. "Testing The New Economic Geography: Migrations And Industrial Agglomerations In Spain," Journal of Regional Science, Wiley Blackwell, vol. 47(2), pages 289-313, May.
    32. Hummels, David, 2001. "Time As A Trade Barrier," Working papers 28701, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    33. Daniel A. Tirado & Julio Martinez-Galarraga, 2008. "Una nova estimacio retrospectiva del VAB regional industrial. Espanya (1860-1930)," Working Papers in Economics 192, Universitat de Barcelona. Espai de Recerca en Economia.
    34. Kim, Sukkoo, 1998. "Economic Integration and Convergence: U.S. Regions, 1840–1987," The Journal of Economic History, Cambridge University Press, vol. 58(3), pages 659-683, September.
    35. Julio Martínez-Galarraga, 2014. "Market potential estimates in history: a survey of methods and an application to Spain, 1867-1930," Working Papers 0051, European Historical Economics Society (EHES).
    36. Antoni Estevadeordal & Brian Frantz & Alan M. Taylor, 2003. "The Rise and Fall of World Trade, 1870–1939," The Quarterly Journal of Economics, Oxford University Press, vol. 118(2), pages 359-407.
    37. Adelheid Holl, 2012. "Market potential and firm-level productivity in Spain," Journal of Economic Geography, Oxford University Press, vol. 12(6), pages 1191-1215, November.
    38. Donald R. Davis & David E. Weinstein, 2002. "Bones, Bombs, and Break Points: The Geography of Economic Activity," American Economic Review, American Economic Association, vol. 92(5), pages 1269-1289, December.
    39. Castañeda, Lluis & Tafunell, Xavier, 1993. "Un nuevo indicador para la historia financiera española: La cotizacion de las letras de cambio a corto plazo," Revista de Historia Económica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 11(2), pages 367-383, September.
    40. K.H. Midelfart & H.G. Overman & S.J. Redding & A.J. Venables, 2000. "The location of European industry," European Economy - Economic Papers 2008 - 2015 142, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    41. Alexander Klein & Nicholas Crafts, 2012. "Making sense of the manufacturing belt: determinants of U.S. industrial location, 1880--1920," Journal of Economic Geography, Oxford University Press, vol. 12(4), pages 775-807, July.
    42. García, Mariano Matilla & Pascual, Pedro Pérez & Carnero, Basilio Sanz, 2009. "La Integración del Mercado Español a Finales del Siglo XIX: Los Precios del Trigo Entre 1891 y 1905," Revista de Historia Económica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 27(2), pages 321-349, January.
    43. Ottaviano, Gianmarco I.P. & Pinelli, Dino, 2006. "Market potential and productivity: Evidence from Finnish regions," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 636-657, September.
    44. Daniel A. Tirado & Jordi Pons & Elisenda Paluzie & Julio Martínez-Galarraga, 2013. "Trade policy and wage gradients: evidence from a protectionist turn," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 7(3), pages 295-318, September.
    45. Hanson, Gordon H., 1996. "Economic integration, intraindustry trade, and frontier regions," European Economic Review, Elsevier, vol. 40(3-5), pages 941-949, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Julio Martínez-Galarraga, 2014. "Market potential estimates in history: a survey of methods and an application to Spain, 1867-1930," Working Papers 0051, European Historical Economics Society (EHES).
    2. Rafael González-Val & Daniel A. Tirado-Fabregat & Elisabet Viladecans-Marsal, 2017. "Market potential and city growth: Spain 1860–1960," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 11(1), pages 31-61, January.
    3. Martinez-Galarraga, Julio, 2012. "The determinants of industrial location in Spain, 1856–1929," Explorations in Economic History, Elsevier, vol. 49(2), pages 255-275.
    4. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    5. Rafael González-Val & Daniel A. Tirado-Fabregat & Elisabet Viladecans-Marsal, 2017. "Market potential and city growth: Spain 1860–1960," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 11(1), pages 31-61, January.
    6. repec:esx:essedp:729 is not listed on IDEAS
    7. Stephen J. Redding, 2010. "The Empirics Of New Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 297-311, February.
    8. Stephen J. Redding & Esteban Rossi-Hansberg, 2017. "Quantitative Spatial Economics," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 21-58, September.
    9. Stephen J. Redding, 2013. "Economic Geography: A Review of the Theoretical and Empirical Literature," Palgrave Macmillan Books, in: Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), Palgrave Handbook of International Trade, chapter 16, pages 497-531, Palgrave Macmillan.
    10. Stefan Nikolić, 2018. "Determinants of industrial location: Kingdom of Yugoslavia in the interwar period," European Review of Economic History, Oxford University Press, vol. 22(1), pages 101-133.
    11. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
    12. Ho Yeon KIM & Petra de Jong & Jan Rouwendal & Aleid Brouwer, 2012. "Shrinking population and the urban hierarchy [Housing preferences and attribute importance among Dutch older adults: a conjoint choice experiment]," ERSA conference papers ersa12p350, European Regional Science Association.
    13. Kim, Ho Yeon, 2012. "Shrinking population and the urban hierarchy," IDE Discussion Papers 360, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    14. Alfonso Díez‐Minguela & Rafael González‐Val & Julio Martinez‐Galarraga & M. Teresa Sanchis & Daniel A. Tirado, 2020. "The long‐term relationship between economic development and regional inequality: South‐West Europe, 1860–2010," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 479-508, June.
    15. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    16. Bode, Eckhardt & Mutl, Jan, 2010. "Testing Nonlinear New Economic Geography Models," Kiel Working Papers 1605, Kiel Institute for the World Economy (IfW).
    17. repec:elg:eechap:14395_20 is not listed on IDEAS
    18. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    19. Fabien Candau, 2008. "Entrepreneurs' Location Choice and Public Policies: a Survey of the New Economic Geography," Post-Print hal-02514085, HAL.
    20. Andreas Eberhard-Ruiz & Alexander Moradi, 2018. "Regional Market Integration and City Growth in East Africa: Local but no Regional Effects?," CSAE Working Paper Series 2018-09, Centre for the Study of African Economies, University of Oxford.
    21. Combes, Pierre-Philippe & Lafourcade, Miren & Thisse, Jacques-François & Toutain, Jean-Claude, 2011. "The rise and fall of spatial inequalities in France: A long-run perspective," Explorations in Economic History, Elsevier, vol. 48(2), pages 243-271, April.
    22. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.

    More about this item

    Keywords

    market potential; New Economic Geography; regional growth; economic history;
    All these keywords.

    JEL classification:

    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • N9 - Economic History - - Regional and Urban History
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • N64 - Economic History - - Manufacturing and Construction - - - Europe: 1913-
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ahe:dtaehe:1409. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/aeheeea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Antònia Morey (email available below). General contact details of provider: https://edirc.repec.org/data/aeheeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.