Compensation Modes of Border Effects in Cross‐Border Regions

27 Pages Posted: 20 Sep 2018

See all articles by Roberta Capello

Roberta Capello

Polytechnic University of Milan

Andrea Caragliu

VU University Amsterdam

Ugo Fratesi

Politecnico di Milano - Department DABC

Date Written: September 2018

Abstract

Both international and regional economics discuss borders as barriers to economic growth. They hamper trade flows between areas sharing an international border (a demand effect), as well as causing firms’ inefficiency because of the increase in production costs (supply side). In the theoretical and empirical discussions, no question has been raised on whether regional economies are able to set up compensation mechanisms, by replacing low endowments with high efficiency in the use of existing assets, or by compensating an inefficient use of internal assets with an efficient use of external ones. The reply to this question has normative implications. Empirical evidence on the universe of 1,398 European NUTS3 regions is presented and policy suggestions elaborated.

Keywords: border obstacles, cross‐border regions, regional growth

Suggested Citation

Capello, Roberta and Caragliu, Andrea and Fratesi, Ugo, Compensation Modes of Border Effects in Cross‐Border Regions (September 2018). Journal of Regional Science, Vol. 58, Issue 4, pp. 759-785, 2018, Available at SSRN: https://ssrn.com/abstract=3252089 or http://dx.doi.org/10.1111/jors.12386

Roberta Capello (Contact Author)

Polytechnic University of Milan ( email )

Piazza Leonardo da Vinci
Milan, Milano 20100
Italy

Andrea Caragliu

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

Ugo Fratesi

Politecnico di Milano - Department DABC ( email )

Piazza Leonardo da Vinci 32
Milano, Milano 20133
Italy

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