Measuring the Impact of the European Regional Policy on Economic Growth: a Regression Discontinuity Design Approach
Abstract
Given the increasing share of the EU budget devoted to Regional Policy, several studies have tried to identify the policy’s contribution to regional economic growth. However, so far no consensus has been reached on the effectiveness of Cohesion policy, due to both limitations in data availability and comparability at regional level, and the difficulties in isolating the effects of the policy from the confounding effect of other factors. The purpose of this paper is to assess the effectiveness of UE Regional Policy, using a counterfactual method - the regression discontinuity design (henceforth RDD). We exploit the allocation rule of regional UE transfer: regions with a per capita GDP level below 75% of the EU average receive a huge amount of UE structural funds transfers. The sharp RDD is based to the jump in the probability of EU transfer receipt at the 75% cut-off point. Comparing the economic scenario arising under policy interventions with a ‘counterfactual’ situation - what would have happened if the policies were not implemented - we identify the economic effect of European regional interventions and show that they are positive and statistically significant. The most part of the larger growth of Obj. 1 regions in the period 1995-2006 can be attributed to Regional Policy.Download Info
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Paper provided by Sapienza University of Rome, DTE in its series Working Papers with number 6/10.
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Handle: RePEc:saq:wpaper:6/10
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Related research
Keywords: cohesion policy; regional growth; evaluation policy impact; regression discontinuity design.;Find related papers by JEL classification:
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
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Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Guido Pellegrini & Augusto Cerqua, 2011.
"Are the subsidies to private capital useful? A Multiple Regression Discontinuity Design Approach1,"
ERSA conference papers
ersa11p1323, European Regional Science Association.
- Augusto Cerqua & Guido Pellegrini, 2011. "Are the subsidies to private capital useful? A Multiple Regression Discontinuity Design Approach," Working Papers 12, Doctoral School of Economics, Sapienza University of Rome, revised 2011.
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