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Institutional Integration and Productivity Growth: Evidence from the 1995 Enlargement of the European Union

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  • Campos, Nauro F.

    (University College London)

  • Coricelli, Fabrizio

    (Paris School of Economics)

  • Franceschi, Emanuele

    (Paris School of Economics)

Abstract

This paper studies the productivity effects of integration deepening. The identification strategy exploits the 1995 European Union (EU) enlargement, when all candidate countries joined the Single Market but one — Norway — did not join the EU. Our synthetic difference-in-differences estimates on sectoral and regional data suggest had Norway chosen deeper integration, the average Norwegian region would have experienced an increase in yearly productivity growth of about 0.6 percentage points. This method also helps determining the sources of heterogeneity, apparently inherent to integration, highlighting higher costs of the missed deeper integration for more peripheral regions and industrial sector.

Suggested Citation

  • Campos, Nauro F. & Coricelli, Fabrizio & Franceschi, Emanuele, 2021. "Institutional Integration and Productivity Growth: Evidence from the 1995 Enlargement of the European Union," IZA Discussion Papers 14834, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14834
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    More about this item

    Keywords

    European Union; productivity growth; economic integration; institutional integration; European Economic Area;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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