Internal Geography and External Trade: Regional Disparities in Italy, 1861-2011

48 Pages Posted: 24 Nov 2011  

Brian A'Hearn

Pembroke College, Oxford

Anthony J. Venables

University of Oxford; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: November 2011

Abstract

This paper explores the interactions between external trade and regional disparities in the Italian economy since unification. It argues that the advantage of the North was initially based on natural advantage (in particular the endowment of water, intensive in silk production). From 1880 onwards the share of exports in GDP stagnated and then declined; domestic market access therefore became a key determinant of industrial location, inducing fast growing new sectors (especially engineering) to locate in regions with a large domestic market, i.e. in the North. From 1945 onwards trade growth and European integration meant that foreign market access was the decisive factor; the North had the advantage of proximity to these markets.

Keywords: geographic concentration, industrialisation, Italian regions, market integration, new economic geography

JEL Classification: F14, F15, N63, N64, N93, N94, R11, R12

Suggested Citation

A'Hearn, Brian and Venables, Anthony J., Internal Geography and External Trade: Regional Disparities in Italy, 1861-2011 (November 2011). CEPR Discussion Paper No. DP8655. Available at SSRN: https://ssrn.com/abstract=1964144

Brian A'Hearn (Contact Author)

Pembroke College, Oxford ( email )

Department of Economics
Manor Road
Oxford, OX1 3UQ
United Kingdom

Anthony J. Venables

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

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