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Why did Spanish regions not converge before the Civil War? Agglomeration and (regional) growth revisited: Spain, 1870-1930

Author

Listed:
  • Alfonso Díez-Minguela

    () (Dpto. Análisis Económico)

  • Julio Martínez-Galarraga

    () (Dpto. Análisis Económico)

  • Daniel A. Tirado Fabregat

    () (Dpto. Análisis Económico)

Abstract

In this paper we explore the relationship between the spatial agglomeration of economic activity and regional economic growth in Spain during the period 1870-1930. The study allows us to revisit the existence of a trade-off between economic growth and territorial cohesion and also to examine whether the agglomeration of production was a key element to explain the upswing in regional income inequality in Spain during the country’s early stages of development. In doing this, we present alternative indicators for agglomeration and estimate conditional growth regressions at province (NUTS3) level. The results show the existence of a positive, robust relationship between the initial levels of regional agglomeration (mainly in the industrial sector) and subsequent growth trajectories. In line with new economic geography (NEG) models, we suggest that the presence of agglomeration economies in a context of market integration favoured the emergence of a cumulative causation process that widened regional inequality in the second half of the 19th century and hindered its reduction during the early decades of the 20th. En este artículo se analiza la existencia de una relación entre la aglomeración espacial de la actividad y el crecimiento económico regional en España durante el periodo 1870-1930. El estudio permite revisitar la existencia de un trade-off entre crecimiento económico y cohesión territorial y, además, examinar si la aglomeración productiva fue un elemento clave a la hora de explicar el incremento de la desigualdad económica regional en España a lo largo de las primeras fases del desarrollo. Para ello, se presentan diferentes indicadores de aglomeración a nivel provincial (NUTS3) que posteriormente se incluyen en la estimación de regresiones de crecimiento condicionadas. Los resultados muestran la existencia de una relación positiva y robusta entre el nivel inicial de aglomeración (principalmente en el sector industrial) y la posterior trayectoria de crecimiento regional. En la línea de los modelos de Nueva Geografía Económica (NEG), sugerimos que la presencia de economías de aglomeración en un contexto de integración de mercado favoreció la aparición de una causación acumulativa que amplió la desigualdad regional en la segunda mitad del siglo XIX y dificultó su reducción durante las primeras décadas del siglo XX.

Suggested Citation

  • Alfonso Díez-Minguela & Julio Martínez-Galarraga & Daniel A. Tirado Fabregat, 2013. "Why did Spanish regions not converge before the Civil War? Agglomeration and (regional) growth revisited: Spain, 1870-1930," Working Papers. Serie EC 2014-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasec:2014-05
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    aglomeración; crecimiento económico; historia económica; España. agglomeration; economic growth; economic history; Spain.;

    JEL classification:

    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N93 - Economic History - - Regional and Urban History - - - Europe: Pre-1913
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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