 Stuck outside the single market; Evidence from firms in central and eastern EuropeJournal of Comparative Economics, 2022, vol. 50, issue 2, 415-434 Abstract: Border effects on firms’ performance are typically estimated following reduced barriers to trade, for instance due to new trade agreements. This paper estimates a border effect on increasing barriers for firms located outside of a new external EU border following the 2004 and 2007 EU enlargement. In a repeated cross-section of three flows of EBRD-World Bank survey data, the study encompasses 23 border regions in 10 countries, four of which bordered new EU/Schengen countries. Taking border transformations as exogenous changes to firms’ environments, and focusing on small and medium-sized enterprises near borders, the results indicate that five years after enlargement, firms in non-EU member states near a new external EU border experienced a fall in sales of 40% and exports of 70% relative to firms near borders that did not change. Firms on the EU side of the same border experienced no such negative effect. Ten years after enlargement, the negative effects effectively disappeared. Keywords: Borders regions; Firms; SME; Exports; EU enlargement; Schengen; Central and eastern Europe (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:50:y:2022:i:2:p:415-434 DOI: 10.1016/j.jce.2021.07.004 Access Statistics for this article Journal of Comparative Economics is currently edited by D. Berkowitz and G. Roland More articles in Journal of Comparative Economics from Elsevier |
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