Advanced Search
MyIDEAS: Login to save this article or follow this journal

Do EU structural funds promote regional growth? New evidence from various panel data approaches

Contents:

Author Info

  • Mohl, P.
  • Hagen, T.

Abstract

This paper analyses the economic growth effects of EU structural funds extending the current literature by at least three aspects: Firstly, we make use of a new structural funds dataset of 126 NUTS-1/NUTS-2 regions as well as more precise measures of structural funds by distinguishing between Objective 1, 2, and 3 payments. In doing so, we include the Financial Perspective 2000-2006, which has not been analysed before. Secondly, we address the problem of endogeneity in a panel context by basing the identification on internal instruments via a system GMM estimator. Finally, we control for spatial spillover effects by applying a spatial panel econometric estimator. Our results show that Objective 1 payments in particular do, in fact, promote regional economic growth, whereas the total amount of Objectives 1, 2, and 3 do not have a positive and significant impact on the EU regions' growth rates.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6V89-4YP8TH1-3/2/76599d5d772864f694998ad106c2d974
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 40 (2010)
Issue (Month): 5 (September)
Pages: 353-365

as in new window
Handle: RePEc:eee:regeco:v:40:y:2010:i:5:p:353-365

Contact details of provider:
Web page: http://www.elsevier.com/locate/regec

Related research

Keywords: EU structural funds Regional economic growth Spatial panel econometrics;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Giuseppe Arbia & Julie Le Gallo & Gianfranco Piras, 2008. "Does Evidence on Regional Economic Convergence Depend on the Estimation Strategy? Outcomes from Analysis of a Set of NUTS2 EU Regions," Spatial Economic Analysis, Taylor & Francis Journals, Taylor & Francis Journals, vol. 3(2), pages 209-224.
  2. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  3. Johnson, Paul & Durlauf, Steven N & Temple, Johnathan R. W., 2004. "Growth Econometrics," Vassar College Department of Economics Working Paper Series 61, Vassar College Department of Economics.
    • Durlauf, Steven N. & Johnson, Paul A. & Temple, Jonathan R.W., 2005. "Growth Econometrics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 8, pages 555-677 Elsevier.
  4. S. Ederveen & H.L.F. de Groot & R. Nahuis, 2003. "Fertile soil for structural funds? a panel data analysis of the conditional effectiveness of European cohesion policy," Working Papers, Utrecht School of Economics 03-14, Utrecht School of Economics.
  5. Newey, Whitney K & West, Kenneth D, 1987. "A Simple, Positive Semi-definite, Heteroskedasticity and Autocorrelation Consistent Covariance Matrix," Econometrica, Econometric Society, Econometric Society, vol. 55(3), pages 703-08, May.
  6. ?gel de la Fuente & Rafael Dom?ech, . "Human Capital In Growth Regressions: How Much Difference Does Data Quality Make?," UFAE and IAE Working Papers, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) 446.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  7. Maria ABREU & Henri L.F. DE GROOT & Raymond J.G.M. FLORAX, 2005. "Space And Growth: A Survey Of Empirical Evidence And Methods," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 21, pages 13-44.
  8. Cornelius Bähr, 2008. "How does Sub-National Autonomy Affect the Effectiveness of Structural Funds?," Kyklos, Wiley Blackwell, Wiley Blackwell, vol. 61(1), pages 3-18, 02.
  9. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," NBER Working Papers 5098, National Bureau of Economic Research, Inc.
  10. Robert J. Barro, 1988. "Government Spending in a Simple Model of Endogenous Growth," NBER Working Papers 2588, National Bureau of Economic Research, Inc.
  11. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, Elsevier, vol. 126(1), pages 25-51, May.
  12. Daniel Cohen & Marcelo Soto, 2001. "Growth and Human Capital: Good Data, Good Results," OECD Development Centre Working Papers 179, OECD Publishing.
  13. Xavier Sala-i-Martin, 1994. "Regional cohesion: Evidence and theories of regional growth and convergence," Economics Working Papers 104, Department of Economics and Business, Universitat Pompeu Fabra.
  14. Nazrul Islam, 2003. "What have We Learnt from the Convergence Debate?," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 17(3), pages 309-362, 07.
  15. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  16. repec:pdn:wpaper:3 is not listed on IDEAS
  17. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
  18. Becker, Sascha & Egger, Peter H & Fenge, Robert & von, Ehrlich Maximilian, 2008. "Going NUTS: The Effect of EU Structural Funds on Regional Performance," Stirling Economics Discussion Papers, University of Stirling, Division of Economics 2008-27, University of Stirling, Division of Economics.
  19. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  20. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  21. Teresa Garcia-Milà & Therese McGuire, 2001. "Do Interregional Transfers Improve the Economic Performance of Poor Regions? The Case of Spain," International Tax and Public Finance, Springer, Springer, vol. 8(3), pages 281-296, May.
  22. Cem Ertur & Wilfried Koch, 2006. "Regional disparities in the European Union and the enlargement process: an exploratory spatial data analysis, 1995–2000," The Annals of Regional Science, Springer, Springer, vol. 40(4), pages 723-765, December.
  23. Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(4), pages 1127-70, November.
  24. Bowsher, Clive G., 2002. "On testing overidentifying restrictions in dynamic panel data models," Economics Letters, Elsevier, vol. 77(2), pages 211-220, October.
  25. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, StataCorp LP, vol. 7(3), pages 281-312, September.
  26. Hagen, Tobias & Mohl, Philipp, 2009. "How does EU cohesion policy work? Evaluating its effects on fiscal outcome variables," ZEW Discussion Papers 09-051, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  27. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  28. Elias Soukiazis & Micaela Antunes, 2006. "Two Speed Regional Convergence In Portugal And the Importance of Structural Funds on Growth," Ekonomia, Cyprus Economic Society and University of Cyprus, Cyprus Economic Society and University of Cyprus, vol. 9(2), pages 222-241, Winter.
  29. Roberto Esposti & Stefania Bussoletti, 2008. "Impact of Objective 1 Funds on Regional Growth Convergence in the European Union: A Panel-data Approach," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 42(2), pages 159-173.
  30. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, StataCorp LP, vol. 9(1), pages 86-136, March.
  31. Dall'erba, Sandy, 2003. "Distribution of Regional Income and Regional Funds in Europe 1989-1999: an Exploratory Spatial Data Analysis," MPRA Paper 1378, University Library of Munich, Germany.
  32. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(3), pages 483-99, June.
  33. Maria Abreu & Henri L.F. de Groot & Raymond J.G.M. Florax, 2004. "Space and Growth," Tinbergen Institute Discussion Papers 04-129/3, Tinbergen Institute.
  34. Ramajo, Julián & Márquez, Miguel A. & Hewings, Geoffrey J.D. & Salinas, María M., 2008. "Spatial heterogeneity and interregional spillovers in the European Union: Do cohesion policies encourage convergence across regions?," European Economic Review, Elsevier, vol. 52(3), pages 551-567, April.
  35. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
  36. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, 02.
  37. 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, Charles University Prague, Faculty of Social Sciences, vol. 57(7-8), pages 324-340, September.
  38. repec:fth:iniesr:430 is not listed on IDEAS
  39. Mohl, Philipp & Hagen, Tobias, 2008. "Which is the Right Dose of EU Cohesion Policy for Economic Growth?," ZEW Discussion Papers 08-104, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  40. Antonio J. Mora & Esther Vayá & Jordi Suriñach & Enrique López-Bazo, 1999. "original: Regional economic dynamics and convergence in the European Union," The Annals of Regional Science, Springer, Springer, vol. 33(3), pages 343-370.
  41. Philippe Martin, 1998. "Can Regional Policies Affect Growth and Geography in Europe?," The World Economy, Wiley Blackwell, vol. 21(6), pages 757-774, 08.
  42. Andrés Rodríguez-Pose & Ugo Fratesi, 2003. "Between development and social policies: the impact of European Structural Funds in Objective 1 Regions," European Economy Group Working Papers, European Economy Group 28, European Economy Group.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:40:y:2010:i:5:p:353-365. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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