Taking advantage of globalization? Spain and the building of the international market in Mediterranean horticultural products, 1850-1935

Abstract

This article examines how globalization and industrialization offered the nations of the European periphery opportunities to develop exports in sectors where they enjoyed a comparative advantage. As a case in point, we consider Spanish exports of Mediterranean horticultural products (MHP). Two bi-equational export supply and demand models (an equilibrium and a disequilibrium model) are proposed, in which volumes and prices are determined simultaneously, to throw light on the main causes of Spain's expanding exports of MHP. The results clearly reflect the primacy of rightward shifts in the supply and demand curves in explaining the growth of MHP trade by volume. Thus, both rising incomes in the more developed countries and technological change in agriculture specializing in these products were key to the growth of this trade. Meanwhile, Spanish exporters also benefited from the increasing integration of international markets, especially through declining transport costs and, to a lesser extent, trade liberalization.