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Market Potential and Border Effects in Europe

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  • Peter Huber
  • Michael Paffermayr
  • Yvonne Wolfmayr

Abstract

We estimate a linear approximation of the market potential function for Europe as derived in geography and trade models. Using a spatial econometric estimation approach, border effects are identified by a differential impact of nearby regions' purchasing power, depending on whether two regions are located within the EU15 or outside the EU15. Our results reveal substantial market potential effects on nominal wage rates. We also find significant border effects between EU15 and non-EU15 countries. Our estimation results suggest that the enlargement of the EU in May 2004 may lead to pronounced wage effects in the new member states, but to relatively small ones for the existing members and that regional disparities within new member states will increase.

Suggested Citation

  • Peter Huber & Michael Paffermayr & Yvonne Wolfmayr, 2006. "Market Potential and Border Effects in Europe," ERSA conference papers ersa06p469, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa06p469
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    2. Annekatrin Niebuhr, 2008. "The impact of EU enlargement on European border regions," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 3(3/4), pages 163-186.
    3. Ferenc Szilágyi, 2012. "Az Érmellék mint határ menti kistérség stratégiai értékelése és lehetséges jövőbeli státusza," Eszak-magyarorszagi Strategiai Fuzetek, Faculty of Economics, University of Miskolc, vol. 9(1), pages 75-89.
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    6. Mátyás Jaschitz, 2012. "Együtt vagy szétválasztva? Kísérletek a két Komárom térszerkezeti súlyának megállapítására," Eszak-magyarorszagi Strategiai Fuzetek, Faculty of Economics, University of Miskolc, vol. 9(1), pages 33-52.
    7. Salas-Olmedo, María Henar & García, Patricia & Gutiérrez, Javier, 2015. "Accessibility and transport infrastructure improvement assessment: The role of borders and multilateral resistance," Transportation Research Part A: Policy and Practice, Elsevier, vol. 82(C), pages 110-129.
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    10. Gergő Medve-Bálint & Sara Svensson, 2012. "A helyi önkormányzatok eurorégiókban való részvétele Közép-Európában," Eszak-magyarorszagi Strategiai Fuzetek, Faculty of Economics, University of Miskolc, vol. 9(1), pages 19-32.
    11. Niebuhr, Annekatrin & Schlitte, Friso, 2008. "EU enlargement and convergence: Does market access matter?," HWWI Research Papers 1-16, Hamburg Institute of International Economics (HWWI).
    12. Lóránt Bali, 2012. "A horvát-magyar határ menti együttműködés főbb aspektusai és leképeződései Barcs és Zala megye példáján," Eszak-magyarorszagi Strategiai Fuzetek, Faculty of Economics, University of Miskolc, vol. 9(1), pages 53-55.
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