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The Impact of Regional Support on Growth and Convergence in the European Union

Author

Listed:
  • Cappelen, A.

    (Statistics, Norway)

  • Castellacci, F.

    (Centre for Technology, Innovation and Culture (TIK), University of Oslo)

  • Fagerberg, J.

    (Centre for Technology, Innovation and Culture (TIK), University of Oslo)

  • Verspagen, B.

    (ECIS, Eindhoven University of Technology)

Abstract

The tendency towards regional convergence that characterised most of the member states of the European Union from the 1950s onwards came to an end around 1980. To the extent that there has been any tendency towards convergence since then, it has been at the country level, related to the catch up by the relatively poor Southern countries that joined the EU during the 1980s. Within countries, however, there has at best been a standstill. A particularly challenging question is to what extent regional support from the EU , designed to help catch-up by relatively poor regions, has had a real impact on this situation. The EU Structural Funds were reformed in 1989. The objective was to make the funds more effective in reducing the gap between advanced and less-advanced regions and strengthening economic and social cohesion in the European Community. Since 1989 the financial resources allocated to these funds have doubled in real terms. The evidence presented in this paper suggests that this reform may have succeeded in improving EU regional policy so that it becomes more effective in its aim, to generate growth in poorer regions and contribute to greater equality in productivity and income in Europe. However it needs to be emphasised that there also are diverging factors at play. For instance, the estimates obtained for the empirical growth model used in this paper suggest that growth in poorer regions is greatly hampered by an unfavourable industrial structure (dominated by agriculture) and lack of R&D. Hence, to get the maximum out of the support, this needs to be accompanied by policies that facilitate structural change and increase R&D capabilities in poorer regions. Such policies must necessarily be of a long-term nature.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Cappelen, A. & Castellacci, F. & Fagerberg, J. & Verspagen, B., 2002. "The Impact of Regional Support on Growth and Convergence in the European Union," Working Papers 02.14, Eindhoven Center for Innovation Studies.
  • Handle: RePEc:ein:tuecis:0214
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    References listed on IDEAS

    as
    1. Jan Fagerberg & Bart Verspagen & Marjolein Caniëls, 1997. "Technology, Growth and Unemployment across European Regions," Regional Studies, Taylor & Francis Journals, vol. 31(5), pages 457-466.
    2. Sala-i-Martin, Xavier X., 1996. "Regional cohesion: Evidence and theories of regional growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1325-1352, June.
    3. Fagerberg, Jan, 1994. "Technology and International Differences in Growth Rates," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1147-1175, September.
    4. Fagerberg, Jan, 1987. "A technology gap approach to why growth rates differ," Research Policy, Elsevier, vol. 16(2-4), pages 87-99, August.
    5. Jan Fagerberg & Bart Verspagen, 1996. "Heading for Divergence? Regional Growth in Europe Reconsidered," Journal of Common Market Studies, Wiley Blackwell, vol. 34(3), pages 431-448, September.
    6. Aadne Cappelen & Jan Fagerberg & Bart Verspagen, 1999. "Lack of regional convergence," Working Papers Archives 1999001, Centre for Technology, Innovation and Culture, University of Oslo.
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    Cited by:

    1. Eva Jelnikar & Urban Murmayer, 2006. "Convergence in Europe: Empirical Analysis on Two Groups of Countries of the European Union," Papers of the Annual IUE-SUNY Cortland Conference in Economics,in: Proceedings of the Conference on Human and Economic Resources, pages 249-263 Izmir University of Economics.
    2. Francesco Aiello & Valeria Pupo, 2009. "Structural Funds And Economic Divide In Italy," Working Papers 200914, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    3. Peter Gripaios & Paul Bishop, 2006. "Objective One Funding in the UK: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 40(8), pages 937-951.
    4. Ram Upendra Das & Ramaa Sambamurty, 2006. "Addressing Global Growth Asymmetries through Regional Trade Integration : Some Explorations," Trade Working Papers 22095, East Asian Bureau of Economic Research.
    5. Marie-Eve Mulquin & Katja Senger, 2011. "Interregional transfers and economic convergence of regions," Serie Politique Economique 58, Facultes Universitaires Notre-Dame de la Paix, Centre de Recherches en Economie Regionale et Politique Economique.
    6. Jan Mønnesland & Jon Inge Lian & Dag Juvkam, 2003. "Evaluation of the geographical scope of the Norwegian regional policy," ERSA conference papers ersa03p215, European Regional Science Association.
    7. Ram Upendra Das, 2010. "Imperatives of Regional Economic Integration in Asia in the Context of Developmental Asymmetries: Some Policy Suggestions," Working Papers id:3037, eSocialSciences.
    8. Nickel, Christiane & Checherita-Westphal, Cristina & Rother, Philipp, 2009. "The role of fiscal transfers for regional economic convergence in Europe," Working Paper Series 1029, European Central Bank.
    9. Jens K. Perret, 2010. "A Core-Periphery Pattern in Russia – Twin Peaks or a Rat’s Tail," EIIW Discussion paper disbei178, Universitätsbibliothek Wuppertal, University Library.
    10. Bourdin, Sebastien & Elissalde, Bernard & Langlois, Patrice & Goya, Dominique, 2011. "Une approche prospective de la configuration des disparités économiques régionales au sein de l'Union européenne par la modélisation et la simulation
      [A forward-looking approach of the configuratio
      ," MPRA Paper 41307, University Library of Munich, Germany, revised 2011.
    11. Aiello, Francesco & Pupo, Valeria, 2009. "Capacità di gestione, efficienza istituzionale e impatto dei Fondi Strutturali in Italia
      [The Impact of Structural Funds in Italy]
      ," MPRA Paper 14429, University Library of Munich, Germany.
    12. Francesco Aiello & Valeria Pupo, 2009. "L’Impatto Dei Fondi Strutturali In Italia," Working Papers 200901, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    13. Valeria Pupo & Francesco Aiello, 2009. "L'impatto della politica regionale dell'Unione Europea. Uno studio sulle regioni italiane," Rivista italiana degli economisti, Società editrice il Mulino, issue 3, pages 421-454.
    14. Moretti, Luigi, 2004. "I modelli macroeconomici per la valutazione dell'impatto dei Fondi strutturali nelle economie a Obiettivo 1
      [Macroeconomic Models Used for the Impact Evaluation of the Structural Funds in Objective
      ," MPRA Paper 18868, University Library of Munich, Germany.

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    Keywords

    regional; growth; convergence; European Union;

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