The economic effect of the EU Eastern enlargement in 2004 on border regions in the old member states

The paper evaluates the impact of the EU Eastern enlargement 2004 on the economic performance of border regions located at the frontier to the new member states in the East. These regions were assumed to be particularly affected by the enlargement because of their geographic proximity to the new member states. Effects are identified by applying a synthetic control method that generates the counterfactual situation, i.e. the hypothetical economic performance of the border regions had the EU Eastern enlargement not taken place. Results show that, overall, the EU Eastern enlargement 2004 had no statistically significant effect on the economic performance of border regions. However, when considering each border region individually, it becomes evident that heterogeneous treatment effects are at play: While the German border regions have predominantly profited from the EU enlargement, for the Italian region, the effect is negative. This heterogeneity seems to be driven by differences in the initial state of regional development as well as in regional import volumes.