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The Effects of the EU Cohesion Policy on Regional Economic Growth: Using Structural Equation Modelling for Impact Assessment

Author

Listed:
  • Stefan Jestl

    (The Vienna Institute for International Economic Studies, wiiw)

  • Ambre Maucorps

    (The Vienna Institute for International Economic Studies, wiiw)

  • Roman Römisch

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

This paper analyses the effects of the EU Cohesion Policy (CP) on the economic growth of 276 European NUTS-2 regions between 2008 and 2016. Using a structural equation model (SEM) consisting of both a measurement component (with two latent variables) and a structural component, we estimate the impact of CP funding on the growth of GDP per capita across EU regions. The estimation also enables us to predict changes in the growth of GDP per capita based on a scenario of CP funding reallocation between member states. Overcoming the limitations of traditional linear regression, SEM modelling proves to be a promising method for impact evaluation, also allowing for the inclusion of indirect causal paths and feedback loops to depict, for example, cross-border economic spillover effects.

Suggested Citation

  • Stefan Jestl & Ambre Maucorps & Roman Römisch, 2020. "The Effects of the EU Cohesion Policy on Regional Economic Growth: Using Structural Equation Modelling for Impact Assessment," wiiw Working Papers 185, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:wpaper:185
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    References listed on IDEAS

    as
    1. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
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    Cited by:

    1. Daniel Franke & Karel Maier, 2023. "Territorial Allocation of Subsidies and Share of EU Structural Funds in the Czech Republic," Politická ekonomie, Prague University of Economics and Business, vol. 2023(4), pages 390-421.
    2. Daniel Franke & Karel Maier, . "Territorial Allocation of Subsidies and Share of EU Structural Funds in the Czech Republic," Politická ekonomie, Prague University of Economics and Business, vol. 0.
    3. Maras Marin, 2022. "The spillover effect of European Union funds between the regions of the new European Union members," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 8(1), pages 58-72, June.

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    More about this item

    Keywords

    Cohesion Policy; regional economic growth; structural equation modelling;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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