New economic geography and economic history: a survey of recent contributions through the lens of the Spanish industrial
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New economic geography and economic history: a survey of recent contributions through the lens of the Spanish industrialization process Julio Martinez‑Galarraga1 · Elisenda Paluzie2 · Jordi Pons3 · Javier Silvestre4 · Daniel A. Tirado1 Received: 24 February 2020 / Accepted: 1 August 2020 © Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract This paper aims to provide a synthesis of a number of articles that over the last few years have explored the industrialization process in Spain from the perspective of the new economic geography (NEG). To this end, we present some of the seminal theoretical papers of the NEG literature from which originated the main theoretical predictions that have been tested through empirical analysis applied to the case of Spain. We also look at those papers on the economic history of Spain that—through the use of an economic geography framework—have analysed how the location and regional concentration of manufacturing has evolved over the years. Altogether, this paper aims not only to present the determinants of the industrial map of Spain, but also to highlight the positive externalities that stem from the interaction between the NEG and economic history, showing the usefulness of a cliometric approach based on economic theory and empirical testing to give us a more detailed knowledge of the past. Keywords Economic history · Economic geography · Manufacturing · Spain JEL Classification N9 · 01 · R1
* Julio Martinez‑Galarraga Julio.Martinez‑[email protected] 1
Departament d’Anàlisi Econòmica, Facultat d’Economia, Universitat de València, Av. dels Tarongers s/n, 46022 València, Spain
2
Departament d’Economia, Universitat de Barcelona, Barcelona, Spain
3
Departament d’Econometria, Estadística i Economia Aplicada, Universitat de Barcelona, Barcelona, Spain
4
Departamento de Estructura e Historia Económica y Economía Pública, Universidad de Zaragoza, Zaragoza, Spain
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One approach is the neoclassical model of production and trade, in which production is determined by factor endowments, technological differences, and the freeness of trade. We contrast this with a new economic geography approach, in which locations derive some of their comparative advantage from scale, and ability to exploit scale is in turn limited by the extent of the market. In this approach firms seeking profitable locations will be drawn to locations with good market access and proximity to clusters of related activities, as well as locations with appropriate factor endowments. We show that this alternative view provides a broad-brush picture that, in many respects, seems consistent with the historical record. Crafts and Venables (2003, p. 324)
1 Introduction The last two centuries have seen unprecedented economic change. Since the start of the Industrial Revolution in Great Britain at the end of the eighteenth century, the spread of industrialization and technology has meant that more and more countries have been able to participate in mo
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