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Information Asymmetry in the European Funds Market: Impact on Resource Allocation and Sustainable Development

Author

Listed:
  • Brenda-Andreea Piuaru

    (Faculty of Economic Sciences and Business Administration, Transilvania University of Brașov, 500036 Brașov, Romania)

  • Bianca Tescașiu

    (Faculty of Economic Sciences and Business Administration, Transilvania University of Brașov, 500036 Brașov, Romania)

  • Gheorghe Epuran

    (Faculty of Economic Sciences and Business Administration, Transilvania University of Brașov, 500036 Brașov, Romania)

  • Mihaela Hrisanta Mosora

    (Faculty of Theoretical and Applied Economics, Bucharest University of Economic Studies, 010374 București, Romania)

  • Ioana Simona Ivasciuc

    (Faculty of Economic Sciences and Business Administration, Transilvania University of Brașov, 500036 Brașov, Romania)

Abstract

The European Funds market is a key mechanism for fostering regional development and economic growth within the European Union, yet its efficiency can be undermined by information asymmetry, which complicates fund absorption processes. This paper investigates the European Funds market and explores how adverse selection and moral hazard impact the dynamics of the fund allocation. Through qualitative research, the authors assess the European Funds market, identify its key stakeholders, and explore factors influencing funds absorption. Findings reveal complex interactions among European Union institutions, managing authorities, beneficiaries, and consultants. The research highlights economic, administrative, institutional, and social factors that affect fund absorption rates and pinpoint adverse selection and moral hazard as primary consequences of information asymmetry in the European Funds market. By emphasizing the importance of effective communication processes and describing the experiences of various actors in European-funded projects, the study provides actionable insights for policymakers and stakeholders. This paper offers a new perspective on the European Funds market and links information asymmetry to inefficiencies in fund allocation. These findings contribute to a better understanding of the European Funds market, fostering transparency, enhancing institutional capacities, and promoting sustainability in the governance of public funds.

Suggested Citation

  • Brenda-Andreea Piuaru & Bianca Tescașiu & Gheorghe Epuran & Mihaela Hrisanta Mosora & Ioana Simona Ivasciuc, 2024. "Information Asymmetry in the European Funds Market: Impact on Resource Allocation and Sustainable Development," Sustainability, MDPI, vol. 16(24), pages 1-30, December.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:24:p:11101-:d:1546781
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    References listed on IDEAS

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