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Regional convergence and the impact of European structural funds over 1989–1999: A spatial econometric analysis

Author

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  • Dall'erba, Sandy
  • Le Gallo, Julie

Abstract

This paper evaluates the impact of structural funds on the convergence process between 145 European regions over 1989–1999. The presence of spillover effects is investigated with spatial econometric methods, which assess the impact of the funds on the targeted region and its neighbours. We also control the potential endogeneity problem in the estimation of their impact. Our estimation results indicate that significant convergence takes place, but that the funds have no impact on it. Simulation experiments show how investments targeted to the peripheral regions never spill over to their neighbours, which calls for a reconsideration of current regional policy tools.

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Handle: RePEc:eee:paresc:v:87:y:2008:i:2:p:219-245
DOI: 10.1111/j.1435-5957.2008.00184.x
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JEL classification:

  • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
  • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
  • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
  • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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