Working Paper: CEPR ID: DP16696
Authors: Nauro F. Campos; Fabrizio Coricelli; Emanuele Franceschi
Abstract: This paper studies the productivity effects of integration deepening. The identificationstrategy exploits the 1995 European Union (EU) enlargement, when all candidate countriesjoined the Single Market but one — Norway — did not join the EU. Our syntheticdifference-in-differences estimates on sectoral and regional data suggest had Norway chosendeeper integration, the average Norwegian region would have experienced an increasein yearly productivity growth of about 0.6 percentage points. This method also helps determiningthe sources of heterogeneity, apparently inherent to integration, highlighting highercosts of the missed deeper integration for more peripheral regions and industrial sector.
Keywords: institutional integration; economic integration; productivity growth; European Union; European Economic Area
JEL Codes: C33; F15; F55; O43; O52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Norway's choice to remain outside the EU (F55) | significant loss of productivity growth (O49) |
| Norway's choice to remain outside the EU (F55) | decrease in yearly productivity growth in average Norwegian region (O49) |
| non-participation in the EU (F55) | additional productivity benefits from deeper integration (O49) |
| Norwegian regions not joining the EU (F55) | productivity growth counterfactuals (O49) |
| pre-1995 productivity trends are parallel (O49) | reliable counterfactuals (D80) |