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Eu Funding €“ A Positive Impact On Gdp?

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  • POP Andrada

    (Babeş-Bolyai University, Faculty of Economic Studies and Business Administration, Finance Department, Cluj-Napoca, Romania)

Abstract

A large number of countries believe that their economy has been boosted thanks to the EU funds. This is difficult to say yes because everyone comes up with different results. Experts in the field have performed numerous and diverse studies on this topic, using different types of methodologies and tools. Several hypothesizes have been tested and the general agreed conclusion is that the main reason for these results is not the amount of money obtained from the EU, but the way they are used. The pro-development way of utilizing the funds has increased the probability to generate valid economic growth. Moreover, long-term planning and strategic implementation regarding EU funds have proven to be more effective than short-time solutions. This paper proposes to analyze the impact of EU funds on the gross domestic product in ten European countries by using linear regression. The Member States must wish and plan for a sustainable, healthy growth, which will not cause the accumulation of risks, imbalances, and painful tensions, however, it will cause inevitable corrections in the future. To do this, countries need to focus on qualitative and not just quantitative growth, which will also determine the convergence of production structures and endowments with infrastructure, not just revenues. This would mean an increase in endowments with production factors. The focus is therefore on increasing the growth potential, an unobservable but extremely important variable of the economy. Many financial experts emphasized that countries of Central and Eastern Europe will spend EU money on the development of roads and railway infrastructure. There is a big recommendation on focusing on Research and Development, which is a tool that could help the economies of the region in the long term. The EU should motivate these countries to absorb the funds as quickly as possible by reprimanding the governments. Experience of best practices is a key element in EU funding and also the trigger for readjusting the framework and mindset of national stakeholders.

Suggested Citation

  • POP Andrada, 2020. "Eu Funding €“ A Positive Impact On Gdp?," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 89-98, July.
    • Handle: RePEc:ora:journl:v:1:y:2020:i:1:p:89-98
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    References listed on IDEAS

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    More about this item

    Keywords

    GDP; EU funds; panel analysis; linear regression;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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