The costs of remoteness: evidence from German division and reunification

Stephen Redding and Daniel Sturm

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper exploits the division of Germany after the Second World War and the reunification of East and West Germany in 1990 as a natural experiment to provide evidence of the importance of market access for economic development. In line with a standard new economic geography model, we find that following division cities in West Germany that were close to the new border between East and West Germany experienced a substantial decline in population growth relative to other West German cities. We provide several pieces of evidence that the decline of the border cities can be entirely accounted for by their loss in market access and is neither driven by differences in industrial structure nor differences in the degree of war related destruction. Finally, we also find some first evidence of a recovery of the border cities after the re-unification of East and West Germany.

Keywords: Market Access; Economic Geography; German Division; German Reunification (search for similar items in EconPapers)
JEL-codes: F15 N94 O18 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2005-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://eprints.lse.ac.uk/3691/ Open access version. (application/pdf)

Related works:
Journal Article: The Costs of Remoteness: Evidence from German Division and Reunification (2008)
Working Paper: The Costs of Remoteness: Evidence from German Division and Reunification (2006)
Working Paper: The Costs of Remoteness: Evidence from German Division and Reunification (2005)
Working Paper: The Costs of Remoteness: Evidence from German Division and Reunification (2005)
Working Paper: The Costs of Remoteness: Evidence from German Division and Reunification (2005)
Working Paper: The costs of remoteness: evidence from German division and reunification (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:3691

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