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A helping hand, but not a lift. EU Cohesion Policy and regional development

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  • Dettmann, Eva
  • Fritz, Sarah

Abstract

This study provides new evidence on the impact of the EU Cohesion Policy on income growth in less developed regions. Our panel includes data from all European regions for the years 1989-2020. Using a fuzzy Regression Discontinuity Design, we model treatment dynamics by applying a random effects estimator. Based on digitized historical data, we precisely replicate the policy rule and correctly classify the regions' eligibility status. Results show that the policy has a moderate positive effect on GDP per capita growth in the targeted regions.

Suggested Citation

  • Dettmann, Eva & Fritz, Sarah, 2025. "A helping hand, but not a lift. EU Cohesion Policy and regional development," IWH Discussion Papers 18/2025, Halle Institute for Economic Research (IWH).
    • Handle: RePEc:zbw:iwhdps:330917
    DOI: 10.18717/k8bw-5d69
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    References listed on IDEAS

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    1. Antonella Rita Ferrara & Philip McCann & Guido Pellegrini & Dirk Stelder & Flavia Terribile, 2017. "Assessing the impacts of Cohesion Policy on EU regions: A non-parametric analysis on interventions promoting research and innovation and transport accessibility," Papers in Regional Science, Wiley Blackwell, vol. 96(4), pages 817-841, November.
    2. Giuseppe Albanese & Guido de Blasio & Andrea Locatelli, 2021. "Does EU regional policy promote local TFP growth? Evidence from the Italian Mezzogiorno," Papers in Regional Science, Wiley Blackwell, vol. 100(2), pages 327-348, April.
    3. Sun, Liyang & Abraham, Sarah, 2021. "Estimating dynamic treatment effects in event studies with heterogeneous treatment effects," Journal of Econometrics, Elsevier, vol. 225(2), pages 175-199.
    4. Maximilian von Ehrlich, 2024. "The Importance of EU Cohesion Policy for Economic Growth and Convergence," Diskussionsschriften credresearchpaper46, Universitaet Bern, Departement Volkswirtschaft - CRED.
    5. Marco Di Cataldo & Vassilis Monastiriotis, 2020. "Regional needs, regional targeting and regional growth: an assessment of EU Cohesion Policy in UK regions," Regional Studies, Taylor & Francis Journals, vol. 54(1), pages 35-47, January.
    6. Luisa Gagliardi & Marco Percoco, 2017. "The impact of European Cohesion Policy in urban and rural regions," Regional Studies, Taylor & Francis Journals, vol. 51(6), pages 857-868, June.
    7. Sascha O. Becker & Peter H. Egger & Maximilian von Ehrlich, 2013. "Absorptive Capacity and the Growth and Investment Effects of Regional Transfers: A Regression Discontinuity Design with Heterogeneous Treatment Effects," American Economic Journal: Economic Policy, American Economic Association, vol. 5(4), pages 29-77, November.
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    9. Marco Percoco, 2017. "Impact of European Cohesion Policy on regional growth: does local economic structure matter?," Regional Studies, Taylor & Francis Journals, vol. 51(6), pages 833-843, June.
    10. Accetturo, Antonio & de Blasio, Guido & Ricci, Lorenzo, 2014. "A tale of an unwanted outcome: Transfers and local endowments of trust and cooperation," Journal of Economic Behavior & Organization, Elsevier, vol. 102(C), pages 74-89.
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    Keywords

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    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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