Fostering the potential endogenous development of European regions: a spatial dynamic panel data analysis of the Cohesion Policy on regional convergence over the period 1980-2005
AbstractIn this paper, we use a conditional-convergence econometric model to investigate whether the Cohesion Policy and the structural funds this policy mobilises, aﬀect the European economies in such a way that the poorer regions catch up with the rich ones. In this model, regional convergence depends on policy treatment and regional economic structure, proxied by investment per capita and the demographic growth rate. The main originality of the model is its speciﬁcation, dealing with temporal and spatial issues at the same time. Econometric estimations rely on a dataset of 143 EU14-NUTS1/NUTS2 regions observed over more than 25 years (from 1980 to 2005). Generalized Method of Moment estimation enables us to obtain consistent estimates of the beta-parameter along with estimates of the impact of regional policies and regional economic structure on regional growth. Our results suggest that Objective 1 programmes have a direct eﬀect on regional GDP p.c. growth rates, whereas total structural funds do not. We interpret this result as an Objective 1 programme added-value, compared to total structural funds. However, these results do not mean that the non-Objective 1 structural funds have no impact on overall growth in the EU (e.g. through a technology diffusion eﬀect) but they do not allow additional growth speciﬁcally in these regions, when we consider the spatial dependences. Moreover, consideration of the spatial dimension of the panel brings to light a still signiﬁcant, but less important, impact of structural funds on convergence.
Download InfoIf 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.
Bibliographic InfoPaper provided by HAL in its series Working Papers with number halshs-00812077.
Date of creation: Jul 2010
Date of revision:
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00812077
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/
Dynamic panels; GMM; Regional Convergence; Spatial Dependence; Structural Funds;
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.:
- 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
2008-27, University of Stirling, Division of Economics.
- Becker, Sascha O. & Egger, Peter H. & von Ehrlich, Maximilian, 2010. "Going NUTS: The effect of EU Structural Funds on regional performance," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 578-590, October.
- Sascha O. Becker & Peter Egger & Maximilian Von Ehrlich & Robert Fenge, 2008. "Going NUTS: The Effect of EU Structural Funds on Regional Performance," CESifo Working Paper Series 2495, CESifo Group Munich.
- José-Antonio Monteiro & Madina Kukenova, 2009.
"Spatial Dynamic Panel Model and System GMM: A Monte Carlo Investigation,"
IRENE Working Papers
09-01, IRENE Institute of Economic Research.
- Kukenova, Madina & Monteiro, Jose-Antonio, 2008. "Spatial Dynamic Panel Model and System GMM: A Monte Carlo Investigation," MPRA Paper 11569, University Library of Munich, Germany, revised Nov 2008.
- Kukenova, Madina & Monteiro, Jose-Antonio, 2008. "Spatial Dynamic Panel Model and System GMM: A Monte Carlo Investigation," MPRA Paper 13405, University Library of Munich, Germany, revised Feb 2009.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-37, October.
- Sandy Dall'erba & Julie Le Gallo, 2003.
"Regional Convergence And The Impact Of European Structural Funds Over 1989-1999: A Spatial Econometric Analysis,"
0310005, EconWPA, revised 12 Feb 2004.
- Sandy Dall'erba & Julie Le Gallo, 2008. "Regional convergence and the impact of European structural funds over 1989-1999: A spatial econometric analysis," Papers in Regional Science, Wiley Blackwell, vol. 87(2), pages 219-244, 06.
- Giuseppe Arbia & Gianfranco Piras, 2005.
"Convergence in per-capita GDP across European regions using panel data models extended to spatial autocorrelation effects,"
ISAE Working Papers
51, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
- Giuseppe Arbia & Gianfranco Piras, 2004. "Convergence in per-capita GDP across European regions using panel data models extended to spatial autocorrelation effects," ERSA conference papers ersa04p524, European Regional Science Association.
- Sjef Ederveen & Henri de Groot & Richard Nahuis, 2002.
"Fertile soil for structural funds? A panel data analysis of the conditional effectiveness of European cohesion policy,"
CPB Discussion Paper
10, CPB Netherlands Bureau for Economic Policy Analysis.
- Sjef Ederveen & Henri L .F. 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, 02.
- 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 03-14, Utrecht School of Economics.
- Korniotis, George M., 2010. "Estimating Panel Models With Internal and External Habit Formation," Journal of Business & Economic Statistics, American Statistical Association, vol. 28(1), pages 145-158.
- Martin, Philippe, 1998.
"Public Policies, Regional Inequalities and Growth,"
CEPR Discussion Papers
1841, C.E.P.R. Discussion Papers.
- Blonigen, Bruce A. & Davies, Ronald B. & Waddell, Glen R. & Naughton, Helen T., 2007.
"FDI in space: Spatial autoregressive relationships in foreign direct investment,"
European Economic Review,
Elsevier, vol. 51(5), pages 1303-1325, July.
- Bruce A. Blonigen & Ronald B. Davies & Glen R. Waddell & Helen T. Naughton, 2004. "FDI in Space: Spatial Autoregressive Relationships in Foreign Direct Investment," NBER Working Papers 10939, National Bureau of Economic Research, Inc.
- Barro, R.J., 1988.
"Government Spending In A Simple Model Of Endogenous Growth,"
RCER Working Papers
130, University of Rochester - Center for Economic Research (RCER).
- Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S103-26, October.
- Robert J. Barro, 1991. "Government Spending in a Simple Model of Endogenous Growth," NBER Working Papers 2588, National Bureau of Economic Research, Inc.
- Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
- Baltagi, Badi H. & Song, Seuck Heun & Koh, Won, 2003.
"Testing panel data regression models with spatial error correlation,"
Journal of Econometrics,
Elsevier, vol. 117(1), pages 123-150, November.
- Badi H. Baltagi & Seuck Heun Song & Won Koh, 2002. "Testing Panel Data Regression Models with Spatial Error Correlation," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B6-4, International Conferences on Panel Data.
- David Roodman, 2007.
"A Note on the Theme of Too Many Instruments,"
125, Center for Global Development.
- Arellano, Manuel & Bover, Olympia, 1995.
"Another look at the instrumental variable estimation of error-components models,"
Journal of Econometrics,
Elsevier, vol. 68(1), pages 29-51, July.
- M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
- Peter Egger & Michael Pfaffermayr, 2006. "Spatial convergence," Papers in Regional Science, Wiley Blackwell, vol. 85(2), pages 199-215, 06.
- 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
28, European Economy Group.
- Andres RodrIguez-Pose & Ugo Fratesi†, 2004. "Between Development and Social Policies: The Impact of European Structural Funds in Objective 1 Regions," Regional Studies, Taylor & Francis Journals, vol. 38(1), pages 97-113.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- 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, vol. 21, pages 13-44.
- Bajo-Rubio, Oscar, 2000. "A further generalization of the Solow growth model: the role of the public sector," Economics Letters, Elsevier, vol. 68(1), pages 79-84, July.
- Xavier X. Sala-i-Martin, 1997.
"I Just Ran Four Million Regressions,"
NBER Working Papers
6252, National Bureau of Economic Research, Inc.
- Richard Blundell & Steve Bond, 1995.
"Initial conditions and moment restrictions in dynamic panel data models,"
IFS Working Papers
W95/17, Institute for Fiscal Studies.
- Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
- Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
- 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.
- 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, vol. 3(2), pages 209-224.
- ERTUR, Cem & KOCH, Wilfried, 2005.
"Growth, Technological Interdependence and Spatial Externalities: Theory and Evidence,"
LEG - Document de travail - Economie
2005-03, LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne.
- Cem Ertur & Wilfried Koch, 2007. "Growth, technological interdependence and spatial externalities: theory and evidence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(6), pages 1033-1062.
- Cem Ertur & Wilfried Koch, 2005. "Growth, Technological Interdependence and Spatial Externalities - Theory and Evidence," ERSA conference papers ersa05p651, European Regional Science Association.
- Salima Bouayad-Agha & Lionel V�drine, 2010. "Estimation Strategies for a Spatial Dynamic Panel using GMM. A New Approach to the Convergence Issue of European Regions," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(2), pages 205-227.
- Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996.
" Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics,"
Journal of Economic Growth,
Springer, vol. 1(3), pages 363-89, September.
- Francesco Caselli & Gerardo Esquivel & Fernando Lefort, 1997. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Working Papers Central Bank of Chile 03, Central Bank of Chile.
- Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-96, September.
- Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1127-70, November.
- Mohl, P. & Hagen, T., 2010. "Do EU structural funds promote regional growth? New evidence from various panel data approaches," Regional Science and Urban Economics, Elsevier, vol. 40(5), pages 353-365, September.
- Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
- Okui, Ryo, 2009. "The optimal choice of moments in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 151(1), pages 1-16, July.
- Badinger, Harald & Müller, Werner G. & Tondl, Gabriele, 2002.
"Regional convergence in the European Union (1985 - 1999) : a spatial dynamic panel analysis,"
HWWA Discussion Papers
210, Hamburg Institute of International Economics (HWWA).
- Harald Badinger & Werner Muller & Gabriele Tondl, 2004. "Regional Convergence in the European Union, 1985- 1999: A Spatial Dynamic Panel Analysis," Regional Studies, Taylor & Francis Journals, vol. 38(3), pages 241-253.
- Gabriele Tondl & Harald Badinger & Werner Müller, 2003. "Regional convergence in the European Union (1985-1999). A spatial dynamic panel analysis," ERSA conference papers ersa03p455, European Regional Science Association.
- 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, vol. 42(2), pages 159-173.
- Steve Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).
If references are entirely missing, you can add them using this form.