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Next Generation EU and industrial transformation: Evidence from Spain

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  • Lozano-Reina, Gabriel
  • Sánchez-Marín, Gregorio
  • Baixauli-Soler, J. Samuel

Abstract

Next Generation EU (NGEU) funds represent a large-scale public investment aimed at mitigating the economic impact of COVID-19 and advancing industrial modernization across the European Union. This study analyzes their early effects in Spain through three objectives: (i) to provide an integrated overview of the design and industrial orientation of the Spain Can Plan, including the role of Industrial Policy Spain 2030 and PERTEs as mission-oriented instruments; (ii) to examine the macro-level implementation of NGEU funds across strategic policy levers, beneficiaries, and regions; and (iii) to assess how sectoral patterns and firm-level characteristics shape the absorption of support. Evidence from the ELISA and SABI databases shows pronounced territorial and sectoral asymmetries, with energy-related and capital-intensive activities receiving a high share of resources. At the firm level, funding allocation is closely linked to pre-existing structural capabilities, whilst post-COVID financial indicators point to improvements in profitability, productivity, and financial stability. The study concludes with policy recommendations to strengthen Spain’s industrial modernization and its strategic positioning in the global economy.

Suggested Citation

  • Lozano-Reina, Gabriel & Sánchez-Marín, Gregorio & Baixauli-Soler, J. Samuel, 2026. "Next Generation EU and industrial transformation: Evidence from Spain," Structural Change and Economic Dynamics, Elsevier, vol. 77(C), pages 123-136.
    • Handle: RePEc:eee:streco:v:77:y:2026:i:c:p:123-136
    DOI: 10.1016/j.strueco.2026.01.002
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