New Construction and Reconstruction: Impact on Growth of Sub-Regions of Mainland Portugal

Based on a panel made up of 28 sub-regions (NUT III) of mainland Portugal for the period 1995-2006, we show that building reconstruction has a positive impact on the economic growth of sub-regions of mainland Portugal, whereas the effect of new construction seems to be of negligible importance. The empirical evidence obtained in this study lets us make suggestions on urban policy for countries in general, and for Portugal in particular, namely to concentrate on reconstruction rather than new buildings.