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Casualties of border changes: evidence from nighttime lights and plant exit

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  • Kristian Behrens

Abstract

We investigate the economic effects of the Russia–Ukraine conflict – following the 2014 annexation of Crimea – on Russian border regions. While southern regions gained market access to Crimea, northern regions lost market access to Ukraine. Using nighttime lights data and geo-referenced plant-level data, we find that regions with deteriorating market access saw 43% less growth in lights – translating into 6–12% lower growth in GDP depending on the assumed lights-GDP elasticity – and a 35% increase in the exit probability for manufacturing plants after 2014. Exploiting variations in closed local border crossings in the northern regions, we find that these effects may be partly driven by less cross-border labour flows.

Suggested Citation

  • Kristian Behrens, 2024. "Casualties of border changes: evidence from nighttime lights and plant exit," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 39(118), pages 359-406.
    • Handle: RePEc:oup:ecpoli:v:39:y:2024:i:118:p:359-406.
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    File URL: http://hdl.handle.net/10.1093/epolic/eiae020
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    More about this item

    Keywords

    F51; F15; R11; R12;
    All these keywords.

    JEL classification:

    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F15 - International Economics - - Trade - - - Economic Integration
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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