Growth effects of European integration

Abstract

This paper deals with the effects of European integration in the EC and EFTA on economic growth. Base regressions suggest that EC and EFTA memberships do in fact have a positive and significant effect on economic growth, and that there is no significant difference between EC and EFTA membership. This result is not completely robust with respect to changes in the set of control variables and to measurement errors. Nonetheless, the results suggest that regional integration may not only affect resource allocation, but also long-run growth rates. This conclusion is strengthened by the fact that we obtain similar results when we use panel data for a sample of OECD countries. A number of tests are also conducted to ascertain that the EC/EFTA variable is not primarily a proxy for the effect of economic development. In addition, we explore possible indirect effects of regional integration.JEL Classification: F15, F43.

Income convergence prospects in Europe: Assessing the role of human capital dynamics

“…On average for the whole EM-11 group, income convergence appears more likely as the projection year increases. This result is in line with the existing empirical results in the literature, which have consistently shown that income dynamics in Europe (and in the EU in particular) are consistent with the existence of convergence in income levels over time (see for example the results in Sala-i-Martin (1996), Henrekson et al (1997) or Crespo Cuaresma et al (2008)). The average results presented in Figure 2 hide a considerable amount of variation across countries in terms of income convergence dynamics in the projection years.…”

European Integration and Inequality among Countries: A Lifecycle Income Analysis

“…Thus, the results obtained in Henrekson et al (1997) suggest that European integration may affect not only static efficiency through changes in resource allocation, but also long term growth rates.…”

The dynamics of economic integration: Theory and policy

“…Edwards (1998) and Dollar (1992) find evidence for a positive impact of international trade on growth. Concerning the European integration, Henrekson et al (1997) find positive dynamic effects, while Vanhoudt (1999) rejects a positive impact on the growth rate. Badinger (2001) argues that the European integration has unfold a significant temporary growth effect.…”