Fabrizio Coricelli

Small and medium‐sized enterprises (SMEs) suffered a sharp contraction in their borrowing from banks during the Great Recession. Analyzing a large firm‐level database for European countries, the paper shows that trade credit amplified the liquidity squeeze on SMEs, with adverse effects on their real activity. SMEs sharply increased their net trade credit and thus transferred financial resources to larger firms. Given the large weight of SMEs in the economy of European countries, the liquidity squeeze of SMEs likely contributed to the depth of the output fall and the slow recovery in Europe during the Great Recession.

The literature on the growth effects of European integration remains inconclusive. This is due to severe methodological difficulties mostly driven by country heterogeneity. This paper addresses these concerns using the synthetic control method. It constructs counterfactuals for countries that joined the European Union (EU) from 1973 to 2004. We find that growth effects from EU membership are large and positive, with Greece as the exception. Despite substantial variation across countries and over time, we estimate that without European integration, per capita incomes would have been, on average, approximately 10% lower in the first ten years after joining the EU.

This book brings together contributions from leading scholars around the world on the most relevant and pressing economic themes surrounding the UK–EU relationship. With chapters spanning from the UK’s accession to the bloc to the aftermath of its decision to leave, the book explores key themes in UK economic growth and EU membership, international trade, foreign direct investment, financial markets and migration. Chapters interrogate the history of the relationship, the depth of foreign direct investment, and responses to the financial crisis. Considering both the history and future of UK and EU relations, the book is a relevant and timely volume that gives welcome context to a fast-changing relationship.