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Regional market integration in Italy during the unification (1832-1882)


  • Missiaia, Anna


The 19th century was a period of great transformations for Italy. Political unification was achieved in 1861 while economic unification was still far off. Ever since, Italian industrialization has been unbalanced, as the pre-existing gap between Northern and Southern economic development has widened. In this context, the creation of the Italian national market has been a highly debated topic. Originally, it was thought that Italian regions did not experience much market integration even after the Unification. This was due to the low complementarity between its regions. However, in recent work, Federico (2007) finds evidence of market integration starting even before 1861. The purpose of the present study is to examine market integration in 19th century Italy within its regional context. The question is whether the Italian market integration observed previously was due to a catch up of some regions in integrating with the international market while others were already integrated or whether the convergence was due to higher integration among Italian regions. Wheat prices will be used as a stand in for overall market integration. The analysis includes descriptive tools such as the mapping of prices and coefficients of variation as well as panel data analysis on the causes of price differentials among city pairs. The results tentatively confirm the hypothesis of the rise of a national market, as price differentials increased more after Unification in the presence of an adjacent foreign market in the city pair .

Suggested Citation

  • Missiaia, Anna, 2009. "Regional market integration in Italy during the unification (1832-1882)," Economic History Working Papers 27885, London School of Economics and Political Science, Department of Economic History.
  • Handle: RePEc:ehl:wpaper:27885

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    References listed on IDEAS

    1. Christopher M. Meissner, 2003. "Exchange-Rate Regimes and International Trade: Evidence from the Classical Gold Standard Era," American Economic Review, American Economic Association, vol. 93(1), pages 344-353, March.
    2. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    3. Federico, Giovanni, 2007. "Market integration and market efficiency: The case of 19th century Italy," Explorations in Economic History, Elsevier, vol. 44(2), pages 293-316, April.
    4. Max-Stephan Schulze & Nikolaus Wolf, 2009. "On the origins of border effects: insights from the Habsburg Empire," Journal of Economic Geography, Oxford University Press, vol. 9(1), pages 117-136, January.
    5. 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.
    6. Wolf, Nikolaus, 2005. "Path dependent border effects: the case of Poland's reunification (1918-1939)," Explorations in Economic History, Elsevier, vol. 42(3), pages 414-438, July.
    7. Federico, Giovanni & Tena, Antonio, 1998. "Was Italy a protectionist country?," European Review of Economic History, Cambridge University Press, vol. 2(01), pages 73-97, April.
    8. North, Douglass, 1958. "Ocean Freight Rates and Economic Development 1730-1913," The Journal of Economic History, Cambridge University Press, vol. 18(04), pages 537-555, December.
    9. O'Rourke, Kevin H., 1997. "The European Grain Invasion, 1870–1913," The Journal of Economic History, Cambridge University Press, vol. 57(04), pages 775-801, December.
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    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • N0 - Economic History - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe


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