Assessing the impact of the 2004 EU enlargement on GDP per capita in new member states: evidence from a Difference-in-Differences approach

The 2004 EU enlargement represented a crucial moment in European economic integration. Yet, its causal impact on GDP per capita of accession countries remains insufficiently explored. This study rigorously evaluates the 2004 EU enlargement effects on GDP per capita of accession countries by addressing methodological gaps in prior work. Using a Difference-in-Differences (DiD) approach, we analyse 1991 to 2023 data for 10 accession countries (treatment group) and 11 non-EU countries (control group). Robustness checks include OLS, fixed/random effects and dynamic GMM models to address endogeneity. The 2004 EU enlargement significantly increased GDP per capita of accession countries with effects persisting throughout crises. The analysis also identified trade openness and GFCF as significant drivers of post-accession GDP growth, highlighting the complex interplay of integration mechanisms while inflation and urbanisation exhibited negative effects on GDP per capita. This paper’s findings underscore the importance of institutional preparedness in shaping post-accession growth, offering actionable insights for EU enlargement policy. The proposed causal framework can guide evaluations of future EU enlargements.