Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp08086.pdf
Non-technical summaryThe investigation of the impact of European regional policy on economic growth and convergence has been intensified over the last decade. However, the results are not clear-cut. While some authors do find evidence of a significant positive impact of structural funds on economic growth, others find weak or even no impact at all. There are many reasons for these mixed results, among others, the low quality of structural funds data at the regional level and a number of methodological problems. Against this background, this paper analyses the growth effects of EU structural funds using a new panel dataset of 124 NUTS-1 / NUTS-2 regions over the time period [1995][1996][1997][1998][1999][2000][2001][2002][2003][2004][2005]. We extend the current literature with regard to at least three aspects: First of all, we extend the time period of investigation using structural funds payments of the last Financial Perspective 2000-2006 that have not been analysed before. Second, we use more precise measures of structural funds by distinguishing between Objective 1, 2 and 3 payments and by investigating the impact of time lags more carefully. Third, we examine the robustness of our results by comparing different econometric approaches highlighting specific methodological problems. Apart from "classical" panel data methods (like system GMM), we apply spatial panel econometric techniques.The empirical evidence indicates that the Objective 1 payments in particular have a positive and significant impact on growth. In contrast, both Objective 2 and Objective 3 payments negatively affect the regions' growth rates. Moreover, the results show that the time lag plays a key role in affecting the results. We find that the growth impact does not appear immediately. Instead, our results indicate that it occurs with a time lag of approximately two to three years. Abstract This paper analyses the growth effects of EU structural funds using a new panel dataset of 124 NUTS-1 / NUTS-2 regions over the time period [1995][1996][1997][1998][1999][2000][2001][2002][2003][2004][2005]. We extend the current literature with regard to at least three aspects: First of all, we extend the time period of investigation, using structural funds payments of the last Financial Perspective 2000-2006 that have not been analysed before. Second, we use more precise measures of structural funds by di...
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