Choosing Institutional Over Economic Integration: Are There Growth Effects?

79 Pages Posted: 28 Jul 2020 Last revised: 16 Aug 2020

See all articles by Nauro Campos

Nauro Campos

University College London

Fabrizio Coricelli

University of Siena - Department of Political and International Sciences ; Paris School of Economics (PSE); Centre for Economic Policy Research (CEPR)

Luigi Moretti

University of Bologna - Department of Economics

Date Written: July 2020

Abstract

This paper studies the effects on productivity of integration deepening. Our identification strategy uses the 1995 European Union (EU) enlargement when all four candidate countries joined the European Economic Area (economic integration) but only one (Norway) chose not to join the EU (institutional integration). Using synthetic control methods on sectoral and regional data, we find that had Norway chosen institutional instead of only economic integration in 1995, the average Norwegian region would have experienced a yearly average productivity growth increase of about half a percentage point. We also find these losses are larger for industry than for other sectors.

Keywords: economic integration, European Union, Institutional integration

JEL Classification: C33, F15, F55, O43, O52

Suggested Citation

Campos, Nauro and Coricelli, Fabrizio and Moretti, Luigi, Choosing Institutional Over Economic Integration: Are There Growth Effects? (July 2020). CEPR Discussion Paper No. DP15078, Available at SSRN: https://ssrn.com/abstract=3661421

Nauro Campos (Contact Author)

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

Fabrizio Coricelli

University of Siena - Department of Political and International Sciences ( email )

Via Mattioli, 10
Siena, 53100
Italy

Paris School of Economics (PSE)

48 Boulevard Jourdan
Paris, 75014 75014
France

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Luigi Moretti

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

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