New empirical insights into the growth effects of economic integration within EU

This paper investigates the existence of medium and long-run growth effects of economic integration within the European Union. We apply the system GMM methodology to estimate a number of dynamic panel data models. The study is undertaken for a panel sample consisting of 27 advanced economies and covering eight time periods between 1960 and 1999. We propose a number of new economic integration variables which presumably better reflect the complex nature of the economic integration process within the EU characterized by gradual widening and deepening. Our results point to an existence of a positive long-term relationship between economic integration and growth rates of real GDP per capita. At the same time we identify a negative medium-run effect on growth of accession into the EU. Both deepening and widening of the economic integration are found to be beneficial to long-term growth performance of Member States. The benefits associated with accession and membership in the EU are found to be asymmetrical.