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Evolution of the influence of geography on the location of production in Spain (1930-2005)

Author

Listed:
  • Chasco, Coro
  • López, Ana María

Abstract

In this paper, we investigate the relative importance of geographic features on the location of production in Spain. Specifically, we want to quantify how much of the spatial pattern of GDP can be attributed to only exoge-nous first nature elements (physical and political geography) and how much can be derived from endogenous second nature factors (man-made agglomeration economies). In order to disentangle both effects empiri-cally, and to learn how they are interrelated, we control for second nature. We use a methodology based on an analysis of variance (ANOVA), which is applied to a panel of 47 Spanish provinces in the period 1930-2005. We demonstrate that results can be biased if spatial autocorrelation and spatial heterogeneity, as well as multicollinearity and endogeneity, are not prop-erly taken into account. In the Spanish case, we detect strong spatial het-erogeneity in the form of two main clusters. As expected, gross second na-ture forces are more important than net natural advantages, though their effects range from about 55% in the hinterland to 80% in the coast.

Suggested Citation

  • Chasco, Coro & López, Ana María, 2008. "Evolution of the influence of geography on the location of production in Spain (1930-2005)," MPRA Paper 9580, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:9580
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    File URL: https://mpra.ub.uni-muenchen.de/9580/1/MPRA_paper_9580.pdf
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    References listed on IDEAS

    as
    1. John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers 1, Center for International Development at Harvard University.
    2. Alberto F. Ades & Edward L. Glaeser, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 195-227.
    3. José María Mella Márquez & Coro Chasco Yrigoyen, 2004. "Urban growth and territorial dynamics in Spain (1985-2001): A spatial econometrics analysis," Urban/Regional 0411003, EconWPA.
    4. Gallup, J.L. & Sachs, J.D. & Mullinger, A., 1999. "Geography and Economic Development," Papers 1, Chicago - Graduate School of Business.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Agglomeration; Geography; Spatial Heterogeneity; Endogeneity; Spanish Regions;

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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