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Heterogeneous growth outcomes of the EU’s regional financial support mediated by institutions with some empirical evidences at NUTS 3 level

Author

Listed:
  • Mindaugas Butkus

    () (Šiauliai University Institute of Regional Development)

  • Alma Maciulyte-Sniukiene

    () (Šiauliai University Institute of Regional Development)

  • Kristina Matuzeviciute

    () (Šiauliai University Institute of Regional Development)

Abstract

Assessing the return of the EU’s regional financial support, the research examines whether financial support promotes economic growth, increases labour productivity, and creates new jobs. Since 2000, these issues have been widely discussed in scientific studies aiming to ascertain if the cost of regional policy is justified, and whether the return on Structural Funds (SF) investments is positive. However, scientific studies mainly test the proposed evaluation models at NUTS 2 or at country level. Moreover, previous contributions in this field mostly model homogeneous effects of SF payments across regions in the EU, encouraging research on the conditioning factors that can foster or hinder effects of the support. In the light of these facts, this article aims to discuss a model that would supplement scientific literature by assessing the return of the EU’s regional financial support capturing heterogeneous effects of SF payments on regional growth. Empirical application is based on NUTS 3 level data over 2000–2006 programming period and estimation of the heterogeneous SF payment effects on the dynamics of per capita GDP growth. Estimations provide an evidence that EU’s regional financial support enhances growth and that significance and size of the positive effect are highly conditioned by institutional quality of the supported region.

Suggested Citation

  • Mindaugas Butkus & Alma Maciulyte-Sniukiene & Kristina Matuzeviciute, 2020. "Heterogeneous growth outcomes of the EU’s regional financial support mediated by institutions with some empirical evidences at NUTS 3 level," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 40(1), pages 33-66, April.
  • Handle: RePEc:spr:jahrfr:v:40:y:2020:i:1:d:10.1007_s10037-019-00137-z
    DOI: 10.1007/s10037-019-00137-z
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    More about this item

    Keywords

    Structural Funds; Cohesion Policy; Regional growth; Institutional quality; NUTS 3;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • 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
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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