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Market potential, European Union and growth

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  • Clemente, Jesús
  • Pueyo, Fernando
  • Sanz, Fernando

Abstract

The successive enlargements of the European Union have implied an important increase of the market where European firms can supply their products. In this paper we analyze the influence of this process on the economic growth of EU members by including the market potential as a scale indicator in a Solow-type model. The main results are: first, the integration in the EU, specially for new members, explain a substantial fraction of subsequent growth (between 15% and 40%); second, this effect diminishes over time; third, the GDP of new members appears to have a greater positive influence than its population; and fourth, peripheral countries and those less open to trade are in a worse position to appropriate such benefits.

Suggested Citation

  • Clemente, Jesús & Pueyo, Fernando & Sanz, Fernando, 2009. "Market potential, European Union and growth," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 719-730, September.
    • Handle: RePEc:eee:jpolmo:v:31:y:2009:i:5:p:719-730
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    3. Zahra Dehghan Shabani & Ali Hussein Samadi & Amene Zare, 2017. "Does Market Potential Matter? Evidence on the Impact of Market Potential on Economic Growth in Iranian Provinces," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(4), pages 847-863, Autumn.

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