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Do Cohesion Funds foster regional trade integration? A structural gravity analysis for the EU regions

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This paper uses a structural gravity model to explore the regional trade and welfare impact of the EU Cohesion Policy Transport Infrastructure Investment programme estimated using a novel dataset of the Generalised Transport Costs for the EU regions at the NUTS2 level. The results indicate that on average additional investment in transport infrastructure can increase NUTS2 total regional exports by 0.40% and regional real GDP 1.13%. Central and Eastern European Regions enjoy the highest exports and GDP gains, while few Western European regions experience a negligible decrease in wages, which may occur as a result of factor price convergence.

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  • Yevgeniya Shevtsova & Jorge Diaz-Lanchas & Damiaan Persyn & Giovanni Mandras, 2021. "Do Cohesion Funds foster regional trade integration? A structural gravity analysis for the EU regions," JRC Working Papers on Territorial Modelling and Analysis 2021-07, Joint Research Centre.
    • Handle: RePEc:ipt:termod:202107
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    File URL: https://publications.jrc.ec.europa.eu/repository/handle/JRC126277
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    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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