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Enlargement and the EU Periphery : The Impact of Changing Market Potential

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  • Crozet, Matthieu
  • Brülhart, Marius
  • Koenig, Pamina

Abstract

We study the impact of changing relative market access in an enlarged EU on the economies of incumbent Objective 1 regions. First, we track the impact of external opening on internal spatial configurations in a three-region economic geography model. External opening gives rise to potentially offsetting economic forces, but for most parameter configurations it is found to raise the locational attractiveness of the region that is close to the external market. Then, we explore the relation between market access and economic activity empirically. We simulate the impact of enlargement on EU Objective 1 regions. Predicted market-access induced gains in regional GDP and manufacturing employment are up to seven times larger in regions proximate to the new accession countries than in ?interior? EU regions. We also find that a future Balkans enlargement could be particularly effective in reducing economic inequalities among the EU periphery, due to the positive impact on relative market access of Greek regions. --

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Bibliographic Info

Paper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 270.

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Date of creation: 2004
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Handle: RePEc:zbw:hwwadp:26330

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Web page: http://www.econstor.eu/handle/10419/20
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Keywords: new economic geography; market potential; EU enlargement; Objective 1 regions;

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  1. Richard E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR & CES & MSH, vol. 12(24), pages 125-176, 04.
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  3. Pfluger, Michael, 2004. "A simple, analytically solvable, Chamberlinian agglomeration model," Regional Science and Urban Economics, Elsevier, vol. 34(5), pages 565-573, September.
  4. Elisenda Paluzie Hernandez, 1999. "Trade policy and regional inequalities," Working Papers in Economics 48, Universitat de Barcelona. Espai de Recerca en Economia.
  5. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, vol. 49(1), pages 137-150, April.
  6. Annekatrin Niebuhr, 2003. "Market Potential and Regional Disparities in Europe," ERSA conference papers ersa03p178, European Regional Science Association.
  7. Forslid, R. & Haaland, J.I. & Knarvik, K.H.M. & Maestad, O., 1999. "Integration and Transition: Scenarios for Location of Production and Trade in Europe," Papers 13/99, Norwegian School of Economics and Business Administration-.
  8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  9. Kohler, Wilhelm K., 2004. "Eastern Enlargement of the EU : A Comprehensive Welfare Assessment," HWWA Discussion Papers 260, Hamburg Institute of International Economics (HWWA).
  10. Monfort, Philippe & Nicolini, Rosella, 1998. "Regional Convergence and International Integration," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1998022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  11. Behrens, Kristian & Gaigné, Carl & Ottaviano, Gianmarco Ireo Paolo & Thisse, Jacques-François, 2003. "Inter-regional and International Trade: Seventy Years After Ohlin," CEPR Discussion Papers 4065, C.E.P.R. Discussion Papers.
  12. Brülhart, Marius & Traeger, Rolf, 2003. "An Account of Geographic Concentration Patterns in Europe," HWWA Discussion Papers 226, Hamburg Institute of International Economics (HWWA).
  13. Rikard Forslid & Gianmarco I.P. Ottaviano, 2003. "An analytically solvable core-periphery model," Journal of Economic Geography, Oxford University Press, vol. 3(3), pages 229-240, July.
  14. Kohler, Wilhelm, 2004. "Eastern enlargement of the EU: a comprehensive welfare assessment," Journal of Policy Modeling, Elsevier, vol. 26(7), pages 865-888, October.
  15. Matthieu Crozet & Pamina Koenig-Soubeyran, 2002. "Trade Liberalization and the Internal Geography of Countries," Working Papers 2002-37, Centre de Recherche en Economie et Statistique.
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