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

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, comparable and reliable measure to proxy for 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 across and within municipalities 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 – somewhat surprisingly – convergence across the border has been almost complete. Polish towns that used to be economically much weaker have caught up with German towns. Also, we show that the patterns of economic activity related to distance vary greatly for Germany and Poland.