European Integration and the Effects of Country Size on Growth

Jörg König ()
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Jörg König: Georg-August-University of Goettingen, Postal: Georg-August-University of Goettingen, Platz der Goettinger Sieben 3, 37073 Goettingen, Germany,

Journal of Economic Integration, 2015, vol. 30, issue 3, 501-531

Abstract: Does the size of a country affect its economic growth rate? Theory suggests that the existence of a national scale effect is favouring large countries and that small countries may overcome the impediments of smallness once their markets become internationally more integrated. So far, empirical evidence of a distinct impact of country size on economic growth is rather limited. The present study sheds light on this impact from a European perspective. Country size indeed correlates with economic growth and European economic integration enhances the convergence process of the countries. It is further shown that the impact of size varies according to a country’s individual level of economic integration, suggesting that the long-term economic growth path is characterized by multiple transition points. This finding is particularly important given the prevailing imperfections of the European Union Single Market and the increasing number of small European Union member states.

Keywords: Country Size; European Economic Integration; Economic Growth; Economic Convergence; Panel Data; Fixed Effects (search for similar items in EconPapers)
JEL-codes: C23 F15 F43 O52 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0666

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