Why isn't the whole of Spain industrialized? the localization of Spanish manufacturing during the early industrialization (1797-1910)

Abstract

The regions of Spain provide a unique opportunity to study the causes of regional differences in industrial development because manufacturing concentration and regional specialization rose substantially during the early phases of industrialization. I employ a model nesting HeckscherOhlin and Economic Geography Frameworks to study that phenomenon, and fmd that comparative advantage and increasing returns effects were economically very significant and practically explained all differences in industrialization levels across regions. The deficit (surplus) of some regions in industrialization appears to have been largely attributable to their factor endowments and the absence (presence) of home markets effects for industries with increasing returns.