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The convergence process of the European regions: the role of Regional Policy and the Common Agricultural Policy

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  • Montresor, Elisa
  • Pecci, Francesco
  • Pontarollo, Nicola

Abstract

The study investigates the convergence of labour productivity in 204 NUTS2 regions of the EU-15 between 1995 and 2006. The main objective of our work was to assess whether and to what extent European Union (EU) policies (Regional Policy and Common Agricultural Policy) have been effective in promoting economic growth and fostering the process of convergence of EU regions. These policies can have an asymmetric spatial impact, even if some concrete steps have been taken to avoid an excessive concentration of costs or benefits. To verify the effects of EU policies we compare different scenarios: with/without EU policies. Under a methodological profile, we adopt the Solovian model proposed by Mankiw et al. (1992). For the estimates we used an econometric approach based on spatial filters with characteristics similar to Geographically Weighted Regression (GWR) in order to obtain consistent estimates of both the convergence parameters β and the impact of the conditioning variables, policy measures in particular. Our technique allows the estimation of different convergence rates for each region and management of both the presence of spatial spillovers and structural differences in the regional economies. The results indicate that global convergence rates are comparable to those obtained in some other studies, while local coefficients help to interpret the regional growth paths in a more realistic way. Finally, we utilise a quasi-experimental design, the Regression Discontinuity, for comparing the results of policy interventions, in terms of regional β-convergence rates, with a ‘counterfactual’ scenario.

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File URL: http://purl.umn.edu/119653
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Bibliographic Info

Article provided by Research Institute for Agricultural Economics in its journal Studies in Agricultural Economics.

Volume (Year): 113 (2011)
Issue (Month): 2 (October)
Pages:

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Handle: RePEc:ags:stagec:119653

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Related research

Keywords: Regional growth; Structural Funds; CAP subsidies; productivity convergence; spatial filters; Agricultural and Food Policy; Community/Rural/Urban Development;

References

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  1. Julie LE GALLO (IERSO, IFReDE-GRES) & Sandy DALL’ERBA (REAL, University of Illinois at Urbana-Champaign), 2004. "Evaluating the Temporal and the Spatial Heterogeneity of the European Convergence Process, 1980-1999," Cahiers du GRES 2004-23, Groupement de Recherches Economiques et Sociales.
  2. Andres RodrIguez-Pose & Ugo Fratesi†, 2004. "Between Development and Social Policies: The Impact of European Structural Funds in Objective 1 Regions," Regional Studies, Taylor and Francis Journals, vol. 38(1), pages 97-113.
  3. Fagerberg, Jan & Verspagen, Bart, 1996. "Heading for divergence? Regional growth in Europe reconsidered," Open Access publications from Maastricht University urn:nbn:nl:ui:27-18068, Maastricht University.
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  5. Giuseppe Arbia & Michele Battisti & Gianfranco Di Vaio, 2009. "Institutions and geography: Empirical test of spatial growth models for European regions," Quaderni del Dipartimento di Economia, Finanza e Statistica 72/2009, Università di Perugia, Dipartimento Economia, Finanza e Statistica.
  6. Roberto Esposti, 2007. "Regional Growth and Policies in the European Union: Does the Common Agricultural Policy Have a Counter-Treatment Effect?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(1), pages 116-134.
  7. Riccardo Crescenzi & Andrés Rodriguez-Pose & Michael Storper, 2007. "The territorial dynamics of innovation: a Europe-United States comparative analysis," Journal of Economic Geography, Oxford University Press, vol. 7(6), pages 673-709, November.
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  9. Ron Martin, 2000. "Emu Versus The Regions? Regional Convergence And Divergence In Euroland," ESRC Centre for Business Research - Working Papers wp179, ESRC Centre for Business Research.
  10. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  11. Sandy Dall’erba & Julie Le Gallo, 2007. "The Impact of EU Regional Support on Growth and Employment," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 57(7-8), pages 324-340, September.
  12. Guido Imbens & Thomas Lemieux, 2007. "Regression Discontinuity Designs: A Guide to Practice," NBER Working Papers 13039, National Bureau of Economic Research, Inc.
  13. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
  14. Lee, David S., 2008. "Randomized experiments from non-random selection in U.S. House elections," Journal of Econometrics, Elsevier, vol. 142(2), pages 675-697, February.
  15. Juan R. Cuadrado-Roura, 2001. "Regional convergence in the European Union: From hypothesis to the actual trends," The Annals of Regional Science, Springer, vol. 35(3), pages 333-356.
  16. Manfred M. Fischer & Daniel A. Griffith, 2008. "Modeling Spatial Autocorrelation In Spatial Interaction Data: An Application To Patent Citation Data In The European Union," Journal of Regional Science, Wiley Blackwell, vol. 48(5), pages 969-989.
  17. Sjef Ederveen & Henri L.F. de Groot & Richard Nahuis, 2002. "Fertile Soil for Structural Funds?," Tinbergen Institute Discussion Papers 02-096/3, Tinbergen Institute.
  18. Fischer, Manfred M. & Stirböck, Claudia, 2004. "Regional Income Convergence in the Enlarged Europe, 1995-2000: A Spatial Econometric Perspective," ZEW Discussion Papers 04-42, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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