Real versus virtual growth: An Analysis of regional Dynamics

The main objective of this paper is to study the growth dynamics of Spanish provinces over the 1955-1993 period. In particular, it analyses production, employment and productivity growth and underlines the importance of provincial productive specialisation, the structural changes associated with it, and other factors influencing regional/provincial dynamics. The method used is based on a dynamic adaptation of shift-share analysis which enables, on one hand, to evaluate each factor’s contribution to growth and, on the other, to carry out a simulation exercise in order to analyse the real evolution of the variables considered and the one which would have been obtained by taking each of these factors separately (virtual growth). The data base used is the series on the Spanish National Income and its distribution by provinces, elaborated by the Foundation BBV, which presents a sectoral disaggregation of 24 activity branches.