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Regional convergence and the impact of European structural funds over 1989-1999 : a spatial econometric analysis

Author

Listed:
  • Sandy Dall'Erba

    (School of Geography and Development - University of Arizona)

  • Julie Le Gallo

    (CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE])

Abstract

. This paper evaluates the impact of structural funds on the convergence process between 145 European regions over 1989–1999. The presence of spillover effects is investigated with spatial econometric methods, which assess the impact of the funds on the targeted region and its neighbours. We also control the potential endogeneity problem in the estimation of their impact. Our estimation results indicate that significant convergence takes place, but that the funds have no impact on it. Simulation experiments show how investments targeted to the peripheral regions never spill over to their neighbours, which calls for a reconsideration of current regional policy tools. Resumen. Este artículo evalúa el impacto de los fondos estructurales en el proceso de convergencia entre 145 regiones europeas durante el periodo 1989–1999. La presencia de efectos derrame (spill over) se investigó mediante métodos econométricos espaciales, que evalúan el impacto de los fondos en la región objetivo y sus vecinas. También controlamos el problema de endogeneidad potencial en la estimación del impacto. Los resultados de nuestra estimación indican la presencia significativa de una convergencia, pero que los fondos no tienen un impacto sobre la misma. Experimentos de simulación muestran que las inversiones dirigidas a las regiones periféricas nunca derraman (spill over) sobre sus vecinas, lo cual pide reconsiderar las herramientas actuales de política regional.
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Suggested Citation

  • Sandy Dall'Erba & Julie Le Gallo, 2008. "Regional convergence and the impact of European structural funds over 1989-1999 : a spatial econometric analysis," Post-Print hal-00485031, HAL.
    • Handle: RePEc:hal:journl:hal-00485031
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    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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