The Impact of EU-Accession on Regional Business Cycle Synchronization and Sector Specialization

According to difference-in-difference estimates business cycle synchronization and similarity in sector structures between acceding and pre-existing regions reduced after Eastern Enlargement. Results for Northern enlargement are more ambiguous. In both enlargements, however, region pairs affected by enlargement with highly synchronized business cycles before enlargement experienced smaller increases in business cycle synchronization and weaker reductions of structural differences relative to similar unaffected region pairs than region pairs with less synchronized business cycles. Similarly, affected regions that were more similar in terms of sector structure before enlargement experienced larger reductions in structural differences and business cycle synchronization than similar unaffected region pairs.