External Integration, Structural Transformation and Economic Development: Evidence From Argentina

Pablo Fajgelbaum () and Stephen Redding

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper uses the natural experiment of Argentina's integration into world markets in the late-nineteenth century to provide evidence on the role of internal geography in shaping the effects of external integration. We develop a quantitative model of the distribution of economic activity across regions and sectors. The model predicts a spatial Balassa-Samuelson effect, in which locations with better access to world markets have higher population densities, higher shares of employment in the non-traded sector, higher relative prices of non-traded goods, and higher land prices relative to wages. We use the model and data on population density and sectoral employment shares to recover sufficient statistics that isolate the economic mechanisms through which external and internal integration affect economic development. Our analysis highlights the role of complementary investments in internal infrastructure and technology adoption in mediating the economy's response to external integration.

Keywords: External integration; economic development; structural transformation (search for similar items in EconPapers)
JEL-codes: F11 F14 O13 O14 (search for similar items in EconPapers)
Date: 2014-06
New Economics Papers: this item is included in nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (61)

Downloads: (external link)
https://cep.lse.ac.uk/pubs/download/dp1273.pdf (application/pdf)

Related works:
Working Paper: External integration, structural transformation and economic development: evidence from Argentina (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1273

Access Statistics for this paper

More papers in CEP Discussion Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().