Abstract
Objective. This article analyzes the extent to which the Spanish-Portuguese border continues to explain territorial inequality in per capita gross domestic product in La Raya during the period 2000–2023.
Design/methodology/approach. An annual panel of 18 border NUTS-3 regions is constructed, comprising seven Spanish provinces and eleven Portuguese subregions. Territorial inequality is measured using the population-weighted Theil index and is additively decomposed into intra-country and inter-country components. The inter-country component is interpreted as a measure of the frontier effect. The analysis is complemented by Moran’s global index and local indicators of spatial association.
Results/Discussion. The results show that the cross-country component explains, on average, 52.9% of total inequality, with an intensification during the financial crisis and the 2008–2013 adjustment period. Global spatial autocorrelation is positive, albeit limited, while the local analysis identifies persistent pockets of low income, especially in the Portuguese Douro region.
Conclusions. The border continues to act as a significant economic discontinuity, albeit with varying intensity.
Originality/Value. The study offers a longitudinal, replicable, and decomposable measure of the border effect, integrating regional inequality and spatial dependence within a single analytical framework.