Mediating Effects of Cohesion Policy and Institutional Quality on Convergence between EU Regions: An Examination Based on a Conditional Beta-Convergence Model with a 3-Way Multiplicative Term

Butkus, Mindaugas; Mačiulytė-Šniukienė, Alma; Matuzevičiūtė, Kristina

doi:10.3390/su12073025

Cited by 4 publications

(4 citation statements)

References 61 publications

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“…As expected, the estimations revealed that conditional beta convergence between EU NUTS 2 regions is present. It is in line with Bisciari, Essers & Vincent [31], Butkus, Mačiulyt ė-Šniukien ė & Matuzeviči ūt ė [32], Cartone, Postiglione, & Hewings [33] findings. However, regional economic disparities are still substantial [11], and the rate of convergence is slow.…”

Section: Discussion and Policy Implicationssupporting

confidence: 89%

Infrastructure and EU Regional Convergence: What Policy Implications Does Non-Linearity Bring?

et al. 2022

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One of the priority areas of the EU is infrastructure development. Over 2021–2027, it is planned to allocate more than 116 billion EUR of support from EU structural funds to transport and ICT infrastructure. For investments to promote the growth of lagging regions and reduce regional disparities, investments must be efficiently allocated. Considering limitations of previous studies, this study aims to provide recommendations for policymakers regarding infrastructure investment allocation after assessing the non-linear relationships between transport and ICT infrastructure development and convergence of EU MS NUTS2 regions. The general specification for estimations is based on the neoclassical conditional beta-convergence model. Additionally, a non-linear specification with interactions is developed to estimate the effect of infrastructure development on convergence. We used Generalized Methods of Movement estimator for the robustness check to reduce possible endogeneity bias. Estimations indicated that a non-linear relationship between infrastructure development and convergence is present. We have found strong evidence of the diminishing marginal effect of infrastructure development on convergence and have identified a tipping point after which infrastructure development slows down convergence, i.e., convergence is still present but at a slower rate. The study results made it possible to present several essential recommendations to policymakers that would increase the effectiveness of investments in infrastructure. Investments should be distributed according to smaller regional units, i.e., NUTS 2 level. The optimal level of infrastructure development that ensures convergence of regions for each type of infrastructure has to be established to ensure that the investments are not too intense and to generate the maximum potential outcomes.

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Section: Discussion and Policy Implicationssupporting

confidence: 89%

Infrastructure and EU Regional Convergence: What Policy Implications Does Non-Linearity Bring?

et al. 2022

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“…Following Wright (1976), Friedrich (1982), and Leona and West (1991), it can be argued that not just the slope of gr i,t→T on F i,t varies depending on the values of D i,t , I i,t and their interaction, i.e., I i,t D i,t , as Equation (3) shows, but also the standard error associated with this slope. According to Butkus et al (2020), the standard error of the estimated composite term…”

Section: Methodsmentioning

confidence: 99%

The Heterogeneous Impact of Financialisation on Economic Growth in the Long Run

Setikiene

Butkus

2021

JRFM

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Financialisation, i.e., the process by which financial markets and their participants gain more influence over the functioning of enterprises/companies and the framework of the financial system, changes the functioning of the economic system, both at the macro- and microeconomic level. There is no doubt that financialisation impacts economic growth. Still, research does not substantiate the heterogeneity of financialisation effects and does not provide a comprehensive analysis of the sources of heterogeneity. In most cases, researchers provide only theoretical insights into what may lead to different effects of financialisation on economic growth. This study empirically examines whether institutional quality and economic development intermediate the relationship between financialisation and economic growth using a panel of 96 countries over the period of 1996–2017 and least squares dummy variables (LSDV) estimator. We found that the impact of financialisation on economic growth differs across countries and that institutional quality and economic development are the sources of the heterogeneous impact of financialisation on economic growth.

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“…As Banerjee, Duflo & Qian (2020) and Chen et al (2021) mentioned, TI inequality leads to negative consequences such as inefficient allocation of resources, knowledge spill-over interruption, and market vulnerability. The efficiency of investment allocation could depend on the institutional quality (Butkus et al, 2020). The distribution of funds for TI projects is mainly influenced by corruption.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…where expression in the brackets shows that the effect of TII on growth is conditional and depends on the level of TII and control of corruption simultaneously. The formulae for calculating standard errors associated with this conditional slope coefficient can be found in Butkus et al (2020).…”

Section: Model and Datamentioning

confidence: 99%

Transport Infrastructure Investments as a Factor of Economic Growth of European Union Countries

Butkus

Mačiulytė-Šniukienė

Matuzevičiūtė

2023

TalTech Journal of European Studies

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Territorial cohesion and improved accessibility are among the main objectives of the European Union (EU) Cohesion policy. Although there is a wealth of literature on the impact of investment in transport infrastructure on overall accessibility levels, only a few studies have tried to evaluate the possible link between transport infrastructure investment (TII) and economic growth in the EU. Our research aims to evaluate the impact of TII on economic growth in the EU. The methodology is based on nonlinear neoclassical specification, which includes a multiplicative term to evaluate if the absence of corruption mediates the effect of TII on growth. Our unbalanced panel data covers 27 EU countries (Cyprus is excluded due to missing data and the United Kingdom is a part of the sample) from 2000 through 2019. Our research confirms a positive and statistically significant impact of TII on economic growth but with a diminishing return. Estimating the absence of corruption as a possible moderator of the effect that TII has on growth shows that control of corruption plays a significant role in the TII growth nexus. We find that in countries with a low level of control of corruption, TII has a statistically significant negative effect on growth.

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Mediating Effects of Cohesion Policy and Institutional Quality on Convergence between EU Regions: An Examination Based on a Conditional Beta-Convergence Model with a 3-Way Multiplicative Term

Cited by 4 publications

References 61 publications

Infrastructure and EU Regional Convergence: What Policy Implications Does Non-Linearity Bring?

Infrastructure and EU Regional Convergence: What Policy Implications Does Non-Linearity Bring?

The Heterogeneous Impact of Financialisation on Economic Growth in the Long Run

Transport Infrastructure Investments as a Factor of Economic Growth of European Union Countries

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