IDEAS home Printed from https://ideas.repec.org/a/avo/emipdu/v26y2017i2p541-559.html
   My bibliography  Save this article

Cohesion Policy Instruments And Economic Growth: Do Institutions Matter?

Author

Listed:
  • Alen Host

    (Faculty of Economics Rijeka)

  • Vinko Zaninovic

    (Faculty of Economics Rijeka)

  • Kresimir Parat

    (Primorje - Gorski Kotar County)

Abstract

The EU Cohesion policy is based on a complex system of fiscal transfers, their main goal being to accelerate economic and social cohesion. In this paper, the contributions of the Structural funds and Cohesion fund (SFCF) to economic growth on national level while controlling for the institutional quality are tested. Aim of the paper is show whether institutional quality is a bottleneck for effective usage of SFCF. The analysis is based on the country-level data during 2000-2013 period. In the presented econometric models, we emphasize the importance of the institutional quality on the economic growth. The results show that when Institutional Quality Indicator as a regressor is included together with the size of inflows from SFCF, SFCF inflows have no influence on economic growth. Moreover, we found that neither the institutional quality separately or in interaction with SFCF inflows, is a statistically significant factor for economic growth in the EU-27. The results are signifincantly different when we apply the same methodology on two subsamples, where we distinguish between countries with high and low level of institutional quality index.

Suggested Citation

  • Alen Host & Vinko Zaninovic & Kresimir Parat, 2017. "Cohesion Policy Instruments And Economic Growth: Do Institutions Matter?," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 26(2), pages 541-559, december.
    • Handle: RePEc:avo:emipdu:v:26:y:2017:i:2:p:541-559
    as

    Download full text from publisher

    File URL: https://hrcak.srce.hr/clanak/282074
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sjef Ederveen & Henri L.F. de Groot & Richard Nahuis, 2006. "Fertile Soil for Structural Funds?A Panel Data Analysis of the Conditional Effectiveness of European Cohesion Policy," Kyklos, Wiley Blackwell, vol. 59(1), pages 17-42, February.
    2. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross‐Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    3. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    4. Aadne Cappelen & Fulvio Castellacci & Jan Fagerberg & Bart Verspagen, 2003. "The Impact of EU Regional Support on Growth and Convergence in the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 41(4), pages 621-644, September.
    5. Aadne Cappelen & Fulvio Castellacci & Jan Fagerberg & Bart Verspagen, 2003. "The Impact of EU Regional Support on Growth and Convergence in the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 41(4), pages 621-644, September.
    6. Knack, Stephen & Keefer, Philip, 1995. "Institutions and Economic Performance: Cross-Country Tests Using Alternative Institutional Indicators," MPRA Paper 23118, University Library of Munich, Germany.
    7. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    8. Guido Pellegrini & Flavia Terribile & Ornella Tarola & Teo Muccigrosso & Federica Busillo, 2013. "Measuring the effects of European Regional Policy on economic growth: A regression discontinuity approach," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 217-233, March.
    9. Ivar Kolstad, 2009. "The resource curse: which institutions matter?," Applied Economics Letters, Taylor & Francis Journals, vol. 16(4), pages 439-442.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elena Calegari & Enrico Fabrizi & Gianni Guastella & Francesco Timpano, 2021. "EU regional convergence in the agricultural sector: Are there synergies between agricultural and regional policies?," Papers in Regional Science, Wiley Blackwell, vol. 100(1), pages 23-50, February.
    2. Areendam Chanda & Louis Putterman, 2004. "Early Starts, Reversals and Catchup in The Process of Economic Development," Working Papers 2004-04, Brown University, Department of Economics.
    3. Jan Fidrmuc & Martin Hulényi & Olga Zajkowska, 2019. "The Elusive Quest for the Holy Grail of an Impact of EU Funds on Regional Growth," CESifo Working Paper Series 7989, CESifo.
    4. Filip Hruza & Stanislav Volcík & Jan Žácek, 2019. "The Impact of EU Funds on Regional Economic Growth of the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 69(1), pages 76-94, February.
    5. Thibaut Dort & Pierre-Guillaume Méon & Khalid Sekkat, 2014. "Does investment spur growth everywhere? Not where institutions are weak," Post-Print CEB, ULB -- Universite Libre de Bruxelles, vol. 67(4), pages 482-505, October.
    6. Yasir Khan & Attiya Yasmin Javid, 2015. "The Impact of Formal and Informal Institutions on Economic Performance: A Cross-Country Analysis," PIDE-Working Papers 2015:130, Pakistan Institute of Development Economics.
    7. Davide Fiaschi & Andrea Mario Lavezzi & Angela Parenti, 2018. "Does EU cohesion policy work? Theory and evidence," Journal of Regional Science, Wiley Blackwell, vol. 58(2), pages 386-423, March.
    8. Carl Henrik Knutsen, 2012. "Democracy and economic growth: A survey of arguments and results," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 15(4), pages 393-415, December.
    9. Mindaugas Butkus & Alma Maciulyte-Sniukiene & Kristina Matuzeviciute, 2020. "Heterogeneous growth outcomes of the EU’s regional financial support mediated by institutions with some empirical evidences at NUTS 3 level," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 40(1), pages 33-66, April.
    10. Andrés Rodríguez‐Pose, 2020. "Institutions and the fortunes of territories," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(3), pages 371-386, June.
    11. Andrés Rodríguez-Pose & Tobias Ketterer, 2020. "Institutional change and the development of lagging regions in Europe," Regional Studies, Taylor & Francis Journals, vol. 54(7), pages 974-986, July.
    12. Christian Bjørnskov & Pierre-Guillaume Méon, 2013. "Is trust the missing root of institutions, education, and development?," Post-Print CEB, ULB -- Universite Libre de Bruxelles, vol. 157(3-4), pages 641-669, December.
    13. Jonathan E. Ogbuabor & Anthony Orji & Charles O. Manasseh & Onyinye I. Anthony-Orji, 2020. "Institutional Quality and Growth in West Africa: What Happened after the Great Recession?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 26(4), pages 343-361, November.
    14. Ilkhom SHARIPOV, 2016. "ECONOMIC GROWTH IN THE EU’S EaP COUNTRIES: DETERMINANTS AND PROSPECTS," EURINT, Centre for European Studies, Alexandru Ioan Cuza University, vol. 3, pages 169-187.
    15. Becker, Sascha O. & Egger, Peter H. & von Ehrlich, Maximilian, 2018. "Effects of EU Regional Policy: 1989-2013," Regional Science and Urban Economics, Elsevier, vol. 69(C), pages 143-152.
    16. Marta Simões & João Andrade & Adelaide Duarte, 2013. "A regional perspective on inequality and growth in Portugal using panel cointegration analysis," International Economics and Economic Policy, Springer, vol. 10(3), pages 427-451, September.
    17. Alessandro Borin & Elisa Macchi & Michele Mancini, 2021. "EU transfers and euroscepticism: can’t buy me love?," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 36(106), pages 237-286.
    18. Gianluigi Coppola & Sergio Destefanis & Giorgia Marinuzzi & Walter Tortorella, 2021. "Regional policies and sectoral outputs in the Italian regions. A multi-input multi-output counterfactual approach," Discussion Paper series in Regional Science & Economic Geography 2021-08, Gran Sasso Science Institute, Social Sciences, revised May 2021.
    19. Mara Giua, 2014. "Spatial Discontinuity for the Impact Assessment of the EU Regional Policy. The Case of Italian Objective 1 Regions," Departmental Working Papers of Economics - University 'Roma Tre' 0197, Department of Economics - University Roma Tre.
    20. Sevastianova Daria, 2009. "Impact of War on Country per Capita GDP: A Descriptive Analysis," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 15(1), pages 1-28, December.

    More about this item

    Keywords

    SFCF; institutional quality; economic growth; convergence;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:avo:emipdu:v:26:y:2017:i:2:p:541-559. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nebojsa Stojcic (email available below). General contact details of provider: https://edirc.repec.org/data/oedubhr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.