Untapped potentials in CE in financial capital flows (Eurostat: propensity to save in neighbouring areas). The quantification of the untapped potentials in the CE area was run through the following two main regression models:
where Δ𝑌 is the 2008-2018 regional growth rate, i refers to assets, inst_barrier to whether the region suffers from institutional and legal barriers more than the average, and c to countries. 𝛿𝑖 measures the impact of each regional growth asset i on regional growth, 𝜗𝑖 measures specifically the impact of asset i on the growth of international border regions with respect to all other regions, and 𝜇𝑖𝑗 measures the impact of assets i on the growth of border regions characterized by legal and administrative barriers j, with respects to all other regions.
When 𝜇𝑖𝑗 is found to be negative and significant, this suggests that CE regions characterised by legal and administrative barriers have a lower growth impact from a specific asset with respect to all other EU regions; in turn, this suggests that, given the presence of legal and administrative borders, this asset is not exploited as in all other regions.
Theme(s): Economy, finance and trade - Economy, Finance and Trade