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Web Appendix to External Integration , Structural Transformation and Economic Development : Evidence from Argentina 1870-1914 ( Not for Publication ) 1

Proof. We assume that each location is fully specialized in sector A. Similar steps apply if a location is fully specialized in M or incompletely specialized, and Proposition 2 shows the condition for complete specialization as function of exogenous variables. Step 1: Solve for {r (`) , w (`) , PN (`)} using conditions (i) and (ii) from Definition 1. First, using (ii) and (11) evaluated at i = A gives the prices as function of the wage-rental ratio,