Events

Dr. Sebastian Ellingsen
Lecturer in Economics
University of Bristol

Do changes in the location of trading opportunities lead to changes in the location
of economic activity? This paper explores this question using a staggered lifting
of restrictions on direct trade with Europe across the Spanish Empire in the 18th
century. I combine a difference-in-differences approach with a dynamic spatial
equilibrium framework and detailed georeferenced data on maritime travel from
historical logbooks to examine this issue. I find that the reform improved market
integration and induced urban growth, but had a smaller effect in locations with
larger internal markets. The findings provide evidence that the location of economic
activity adapts to changes in the location of trading opportunities, but can persist
when these changes are preceded by urban growth.