The growth effect of economic integration in the European Union: An analysis of Turkey-axis

The expected potential growth effects of the economic integration to provide its members are an issue emphasized importantly in the literature. EU is the main interest of this study because of a long-established integration from 1950?s and Turkey?s candidacy. In this study analysing the growth effects of economic integration in Europe, the process of unconditional and conditional convergence was analyzed EU-15 for the period of 1970-2011; EU 2004 and 2007 members for the period of 1996-2010, lastly EU-27 for the period of 1996-2010. All analysis is included Turkish economy data.At the empirical analysis, second generation panel unit root and cointegration tests improved recent years are used. The aim of this study is putting forward to economic integration?s growth effect. In addition, it is aimed to calculate convergence speeds of EU countries and Turkey and able to compare them. For this purpose, long- run cointegration relationship between economic integration and economic growth is determined for all the EU countries and Turkey. Economic integration effects growth positively at the long-run. Also at the long-run model with using Common Correlated Effect Model, long-run unconditional and conditional convergence speeds are calculated one by one.The difference of this study from others estimated parameters Solowian Growth Model can be done also country specific at the long-run. Therefore, it was possible to compare the effect levels of customs union?s on economic growth. This provides important information about EU countries and Turkey.Keywords: Economic Integration, Growth, European Union, CCE Model