The industrial geography of Italy: provinces, regions and border effects, 1871-1911

"Italy has been characterized, throughout its unified history, by large regional differentials in the level of industrialization. This paper looks at the distribution of industrial employment in the period 1871–1911. Using provincial industrial employment from Ciccarelli and Missiaia (2013) we address the question whether the change in the industrial employment at provincial level depends on the change in the industrial employment in the neighbouring provinces. The methodology proposed by Overman and Puga (2002) use neighbouring effects, based on neighbours employment, as explanatory variables for change in industrial employment. The same exercise is repeated using pre-unitary borders to define neighbours, in order to assess the persistence of pre-1861 institutions on the industrial geography of unified Italy. The main result of the paper is that regional borders did matter in shaping the industrial geography of Italy. We find that the change in provincial industrial employment is positively affected by the change of the neighbouring provinces belonging to the same region but negatively from the change of the neighbouring provinces belonging to another region. When the pre-unitary borders are used, the findings are basically confirmed."