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I will survive! The impact of place-based policies when public transfers fade out

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  • Augusto Cerqua
  • Guido Pellegrini

Abstract

Are place-based policies capable of taking lagging areas to a higher growth trajectory permanently? We answer this crucial question by investigating what happens when strongly subsidized regions experience a substantial reduction in funding. By analysing an extensive database via the mean balancing approach, we estimate the causal impact of exiting the convergence region status of the European Union regional policy. We find that only regions that experienced a considerable reduction in funding during a recession suffered a negative impact on economic growth. However, the impact varies with the features of the regions and the local economic context.

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  • Augusto Cerqua & Guido Pellegrini, 2023. "I will survive! The impact of place-based policies when public transfers fade out," Regional Studies, Taylor & Francis Journals, vol. 57(8), pages 1605-1618, August.
    • Handle: RePEc:taf:regstd:v:57:y:2023:i:8:p:1605-1618
    DOI: 10.1080/00343404.2022.2136370
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    Cited by:

    1. Augusto Cerqua & Guido Pellegrini & Ornella Tarola, 2022. "Can regional policies shape migration flows?," Papers in Regional Science, Wiley Blackwell, vol. 101(3), pages 515-536, June.
    2. Paolo Di Caro & Ugo Fratesi, 2022. "One policy, different effects: Estimating the region‐specific impacts of EU cohesion policy," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 307-330, January.

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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