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Does EU Cohesion Policy Promote Growth? Evidence from Regional Data and Alternative Econometric Approaches

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  • Mohl, Philipp
  • Hagen, Tobias

Abstract

This paper analyses the growth e®ects of EU structural funds using a new panel dataset of 124 NUTS-1 / NUTS-2 regions over the time period 1995-2005. We extend the current literature with regard to at least three aspects: First of all, we extend the time period of investigation, using structural funds payments of the last Financial Perspective 2000{2006 that have not been analysed before. Second, we use more precise measures of structural funds by distinguishing between Objective 1, 2 and 3 payments and by investigating the impact of time lags more carefully. Third, we examine the robustness of our results by comparing different econometric approaches highlighting specific methodological problems. Apart from \classical" panel data methods like system GMM, we apply spatial panel econometric techniques. The empirical evidence indicates that the Objective 1 payments in particular have a positive and significant impact on growth, whereas Objective 2 and 3 payments negatively affect the regions' growth rates. Furthermore, our results show that the growth impact occurs with a time lag of approximately two to three years. --

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 08-086.

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Date of creation: 2008
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Handle: RePEc:zbw:zewdip:7428

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Keywords: EU structural funds; economic growth; spatial econometrics;

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  15. Cornelius Baehr, 2006. "How Does Sub-National Autonomy Affect the Effectiveness of Structural Funds?," ERSA conference papers ersa06p470, European Regional Science Association.
  16. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, Elsevier, vol. 126(1), pages 25-51, May.
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Cited by:
  1. Fürst, Dietrich & Hirschfeld, Markus & Jung, Hans-Ulrich & Lammers, Konrad & Nischwitz, Guido & Salow, Sven-Olaf & Sempell, Guido & Skubowius, Alexander, 2012. "Ausgestaltung der EU-Strukturpolitik der Förderperiode 2007 - 2013 in den nordwestdeutschen Bundesländern," Arbeitsmaterial der ARL, Akademie für Raumforschung und Landesplanung (ARL) - Leibniz-Forum für Raumwissenschaften, volume 127, number 358, October.

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