This paper studies the growth of manufacturing industrial value added in the Italian regions from 1861 to 1913 using a recently released dataset at annual frequency and disaggregation in ten industries. Estimation of an approximate factor model shows long-run growth is essentially explained by two nonstationary factors, an essentially monotonous trend and a very long cycle. The loadings of the trend factor are highest in the North-West and lowest in the South. The residuals of the factor model are then studied using spatial autoregressive panel models, which suggest that spatial spillovers were signiÖcant and essentially similar in all industries.
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