Enlargement and the EU Periphery: The Impact of Changing Market Potential

Marius Brülhart, Matthieu Crozet () and Pamina Koenig

Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) from Université de Lausanne, Faculté des HEC, DEEP

Abstract: We study the impact of changing relative market access in an enlarged EU on the economies of incumbent Objective 1 regions. First, we track the impact of external opening on internal spatial configurations in a three-region economic geography model. External opening gives rise to potentially offsetting economic forces, but for most parameter configurations it is found to raise the locational attractiveness of the region that is close to the external market. Then, we explore the relation between market access and economic activity empirically, using data for European regions, and we simulate the impact of EU enlargement on Objective 1 regions. Our predicted market-access induced gains in regional GDP and manufacturing employment are up to seven times larger in regions proximate to the new accession countries than in "interior" EU regions. We also find that a future Balkans enlargement could be particularly effective in reducing economic inequalities among the EU periphery, due to the positive impact on relative market access of Greek regions.

Keywords: economic geography; EU enlargement; market potential; objective 1 regions (search for similar items in EconPapers)
JEL-codes: R12 F12 F15 N94 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo
Date: Written 2004-02
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Published in The World Economy, vol. 27 (6), June 2004, pp.853-876

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Related works:
Working Paper: Enlargement and the EU Periphery: The Impact of Changing Market Potential (2004)
Working Paper: Enlargement and the EU Periphery: The Impact of Changing Market Potential (2004)
Journal Article: Enlargement and the EU Periphery: The Impact of Changing Market Potential (2004)
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