The Economic Impact of Closing the Boundaries: The Lower Minho Valley Cross-Border Region in Times of Covid-19

Abstract

ABSTRACT The COVID-19 crisis experienced since early 2020 has been the first time in decades that all the boundaries between European Union member-states have been systematically re-set. This paper examines the economic impact derived from re-establishing the boundary on a particular cross-border region located between Galicia (Spain) and Portugal. The paper begins by outlining the theoretical considerations on the interplay between borders and economy. After examining the case-study area and the decisions taken by the Spanish and Portuguese authorities in an attempt to control the spread of the virus in 2020, the article explains the methods used to obtain the results. Two sets of results are presented. Firstly, the direct consequences for cross-border economic activities are considered. Secondly, the fall in Gross Domestic Product is quantified for sectors and municipalities in the cross-border region, distinguishing between, on the one hand, the overall effect caused by the restrictions due to the lockdown situation and, on the other, the precise impact attributed to the re-establishment of the international boundary. This is a worthy addition to previous literature given that this paper details the specific economic effects caused by the COVID-19 crisis in a cross-border region directly affected by the boundary closure.