Abstract
In this paper, we study how eastward enlargement of the EU may affect the economies of old and new EU members and non-accession countries in the context of a multi-country neoclassical growth model where foreign investment is subject to border costs. We assume that at the moment of the EU enlargement border costs between the old and new EU member states are eliminated but remain unchanged between the old EU member states and the non-accession countries. In a calibrated version of the model, the short-run effects of the EU enlargement proved to be relatively small for all the economies considered. The long-run effects are however significant: in the accession countries, investors from the old EU member states become permanent owners of about 3/4 of capital, while in the non-accession countries, they are forced out of business by local producers. Journal of Comparative Economics 36 (2) (2008) 307–325.
Paper version not known (
Free)
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call