IDEAS home Printed from https://ideas.repec.org/a/eee/streco/v75y2025icp199-212.html

Geopolitical risks and the effectiveness of the EU funds: Heterogeneity in country impact

Author

Listed:
  • Arbolino, R.
  • Boffardi, R.
  • De Simone, L.
  • Di Caro, P.

Abstract

Despite geopolitical issues are becoming pervasive elements in economic decisions worldwide, current evidence is limited on the impact of geopolitical risks on the effectiveness of structural policies. This paper assembles new data on the Cohesion Policy and Next Generation funds to study the impact of geopolitical risks originating from China and the US on the effectiveness of structural policies in the European Union. The application of a heterogeneous modelling framework allows for the measurement of country-specific impact. Our results, which are robust to alternative specifications, suggest that a raise of geopolitical tensions from the US and China translates in a reduction of the effectiveness of the cohesion funds from -13 % to -30 %. The main negative impact is concentrated in export-oriented and in the Central and Eastern countries. We also document that a raise of geopolitical risks diminishes the expected returns of the NGEU funds. The policy implications of our study are finally discussed.

Suggested Citation

  • Arbolino, R. & Boffardi, R. & De Simone, L. & Di Caro, P., 2025. "Geopolitical risks and the effectiveness of the EU funds: Heterogeneity in country impact," Structural Change and Economic Dynamics, Elsevier, vol. 75(C), pages 199-212.
    • Handle: RePEc:eee:streco:v:75:y:2025:i:c:p:199-212
    DOI: 10.1016/j.strueco.2025.07.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0954349X25001201
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.strueco.2025.07.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:streco:v:75:y:2025:i:c:p:199-212. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/525148 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.