The drivers of Italian exports and product market entry: 1862–1913

Abstract

Between its Unifi cation and WWI, Italy’s changing export composition echoed its economic transformation. In this paper I decompose Italian export growth in its margins, and then analyse the determinants of Italian exports and product market entry (and exit). To do so, I use two different databases (aggregate and product-level bilateral trade data) and methodologies (gravity and logit models). Besides confi rming some well-known empirical and historical facts for the Italian case (gravity variables hold; trade follows a HeckscherOlhin pattern), the regression results offer a new perspective on two distinctive features of its history: trade policy and emigration. These two factors are positively associated with Italian exports and product market entry. These fi ndings also have additional implications for the role of emigration on the course of the Italian economy: accounting for the trade channel, its overall effect may be larger than previously thought.