Lights along the frontier: convergence of economic activity in the proximity of the Polish-German border, 1992–2012

Abstract

This paper studies regional economic development on the municipality-level in Poland and Germany along the Oder–Neisse border. We use high-quality satellite night-time light intensity data as an innovative and comparable measure to proxy for overall economic activity on both sides of the border consistently over a long period of time (1992–2012). We use descriptive heat maps as well as regression analysis to investigate two aspects: first, how far is the economic convergence along the Polish-German border? Second, what effect does the distance to the border have on economic activity as measured with light emissions? Our findings suggest that convergence in overall activity across the border has been complete. Polish municipalities that used to be economically much weaker have caught up with those on the German side of the Oder and the Neisse rivers. As regards the importance of distance, we highlight different results for Germany and Poland. While distance to the border never mattered significantly for German regions, Polish municipalities closer to the border used to be substantially worse off in the early 1990s but caught up with regions further to the east by the end of the period of our analysis.