Regional Differences in the Pace of Structural Change: The Effects of Improved Cross-Border Transport Infrastructure

Abstract: Structural change occurs as economies reallocate factors of production across industries. This paper seeks to investigate the causal effect of international economic integration, achieved through improvements of cross-border transport infrastructure, on regional differences in the pace of structural change. Previous literature focuses on structural change at the national level, and primarily on its direction rather than pace. Through a difference-in-difference identification strategy applied to regional data, we assess if the opening of the Øresund Bridge in 2000 affected the pace of structural change differently for contiguous and non-contiguous regions. Our research indicates that the effect on the pace follows a non-uniform spatial pattern, and that the direction of the effect varies with regional differences.