Jesus Lopez Rodriguez, Ph.D.1, Miguel, A. Marquez-Paniagua, Ph.D.2, and Andres Faiņa, PhD1. (1) Economic Analysis and Business Administration, University of A Coruņa, Facultad de CC.EE y Empresariales, Campus de Elvina s/n. C.P.: 15071, A Coruna, 15071, Spain, (2) Economia Aplicada y Organizacion de Empresas, University of Extremadura, Facultad de Economicas y Empresariales, Avda. de Elvas s/n, Badajoz, 06071, Spain
In this paper the nominal wage equation of a Center-Periphery model of New Economic Geography is derived. In order to show empirical evidence of the resulting hypothesis, the nominal wage equation is estimated for the Spanish provinces in the year 2003. Our results illustrate that the market access variable is statistically significant and quantitatively important in the explanation of the spatial wage structure observed in the Spanish provinces. Moreover, our results show that there are at least three channels through which market access might be affecting Spanish wages: human capital, productive capital and the size of R&D activities.
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