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Productivity Dynamics across European Regions: the Impact of Structural and Cohesion Funds

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  • Davide Fiaschi, Andrea Mario Lavezzi and Angela Parenti

Abstract

This paper analyzes the impact of the European Union regional policy of the three programming periods 1975-1988, 1989-1993 and 1994-1999 on the dynamics of productivity of European regions. On average, funding had a positive, but concave, effect on productivity growth. In particular, a share of funds on GVA of 10% GVA is estimated to raise the regional growth rate of about 0.9% per year. However, by separately considering the three programming periods and the composition of the funds according to the objectives defined by the EU, we find that: i) only the funds allocated in the second and third programming periods, when they remarkably increased, had a significant impact; and ii) only Objective 1 and Cohesion funds played a significantly positive impact, while funds devoted to Objectives 2, 3, 4 and 5 had a negative or non significant impact. The results are robust to potential endogeneity of funds and spatial dependence.

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Bibliographic Info

Paper provided by Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy in its series Discussion Papers with number 2009/84.

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Date of creation: 19 Jun 2009
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Handle: RePEc:pie:dsedps:2009/84

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Keywords: European regional policy; structural change; convergence; European regions.;

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  1. Diego Puga, 1996. "The rise and fall of regional inequalities," LSE Research Online Documents on Economics 20643, London School of Economics and Political Science, LSE Library.
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Cited by:
  1. Manuela Gussoni - Andrea Mangani, 2009. "The impact of public funding for innovation on firms' R&D investments: Do R&D cooperation and appropriability matter?," Discussion Papers 2009/90, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  2. Castellani, Davide & Pieri, Fabio, 2013. "R&D offshoring and the productivity growth of European regions," CIRCLE Electronic Working Papers 2013/20, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  3. Luciano Fanti & Luca Gori, 2009. "Endogenous lifetime in an overlapping generations small open economy," Discussion Papers 2009/92, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

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