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Railways and the Productivity Gap in Italy: Persistence and Divergence after Unification

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  • Nicola Pontarollo
  • Roberto Ricciuti

Abstract

The political unification of Italy in 1861 led to the establishment of a single market, by removing the trade barriers across the pre-existing states, with a single currency. Market integration was the economic outcome of this process. At the same time, the Kingdom of Italy started a large infrastructure project to spread railways, which were largely confined in Northern Italy, all over the country. Using tools from spatial econometrics, we find that railways played a positive effect on productivity, but this effect was stronger in the areas in which railways were already built. Moreover, railways helped industrial firms to locate closer to water sources and gain access from there to the overall market. This effect is in line with New Economic Geography according to which infrastructure lead to a widening of territorial disparities.

Suggested Citation

  • Nicola Pontarollo & Roberto Ricciuti, 2015. "Railways and the Productivity Gap in Italy: Persistence and Divergence after Unification," CESifo Working Paper Series 5438, CESifo.
    • Handle: RePEc:ces:ceswps:_5438
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    References listed on IDEAS

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    Cited by:

    1. Mendieta Muñoz, Rodrigo & Pontarollo, Nicola, 2015. "Cantonal Convergence in Ecuador: A Spatial Econometric Perspective," MPRA Paper 68399, University Library of Munich, Germany.

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    More about this item

    Keywords

    railways; productivity; economic growth; spatial econometrics;
    All these keywords.

    JEL classification:

    • N73 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: Pre-1913
    • N93 - Economic History - - Regional and Urban History - - - Europe: Pre-1913
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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