The home market effect in the Spanish industry, 1965-1995

This study was intended to identify empirically the existence of the home market effect (HME) in Spanish manufacturing industry, a case which shows some incipient evidence in very early stages of development, and an increasing relevance of this phenomenon over time. Our empirical test is carried out with 17 regions between 1965 and 1995, and lends support to the hypothesis of the existence of the HME in five of the nine industries analysed. These results are obtained using a specification in line with the traditional one but new in the sense that it is defined in proportions instead of levels; this approach has conceptual advantages because it is a relative one, like the definition of HME itself

External economies as a mechanism of agglomeration in EU manufacturing

International audienceProductive externalities are significant determinants of agglomeration, not deeply studied at the industry and international level. We analyse the impact on productivity growth of technological externalities, both inter- and intraindustry, national or international, at the industry level for the European Union (EU) countries and the period 1995-2002. The results confirm the advisability of considering international externalities when countries are takes as regions, whose omission underestimates national spillovers. Together with national endowments and a central geographical position, the growth of productivity is encouraged by national and international specialization as a general result; moreover, it is fuelled by stronger interindustry spillovers and productive diversification, a result more evident for high technology industries, while lower technology industries are more sensitive to the omission of international externalities. Economic integration seems to be relevant, because supranational regions with less friction for goods and factor movements are more likely to take advantage of external economies as a mechanism of productivity growth and agglomeration