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Different Models for Regional Integration: Lessons from Total Factor Productivity in Europe

Author

Listed:
  • Jeong Yeon Lee

    (Asian Development Bank Institute)

  • Doyeon Kim

    (Asian Development Bank Institute)

Abstract

The European experience offers three possible models for regional integration: a free trade arrangement, a single market, and a common currency area. This paper examines the effect of regional integration on total factor productivity to assess the long-run growth implications of each model. The findings suggest that joining a regional grouping changes the way participating economies grow. Of the three models, the free trade arrangement is found to be the most effective in promoting intra-regional dependence on R&D spillovers. The other two models are associated with largely negative windfall effects on total factor productivity.

Suggested Citation

  • Jeong Yeon Lee & Doyeon Kim, 2013. "Different Models for Regional Integration: Lessons from Total Factor Productivity in Europe," ADBI Working Papers 452, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:0452
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    References listed on IDEAS

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    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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