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.