Regional Growth in Europe: The Role of European and National Policies

Abstract

We conduct a systematic study of the impact of European Union (EU) regional policies on regional economic growth that controls for national policies and geographic characteristics. Special care is taken in distinguishing between the impact of EU policies and of national policies on economic growth. Our empirical study tries to answer two different questions. First, is there convergence across EU regions, and if so, do regions converge to a common European steady-state or to a national one? Second, how do European and national policies affect regional growth? We find evidence of regional convergence at the national level but not at the European level. In addition we find that trade openness at the national level is associated with regional convergence while European regional policies contribute, though weakly, to regional convergence. Our results suggest that policies that foster market integration -and convergence to a common steady-state -such as the promotion of labour and capital movements across countries and common regulatory policies are as important for European-wide regional convergence as regional structural funds.

Under What Conditions Do Structural Funds Play a Significant Role in European Regional Economic Growth? Some Evidence from Recent Panel Data

“…Beugelsdijk and Eijffinger (2005) and Ederveen et al (2006) interact Funds with a corruption index to analyse the relationship between institutional quality and the effectiveness of EU transfers for growth. 4 Bähr 2008 2003combine a dummy for Objective 1 regions with productivity, just like Llussá and Lopes (2011) interact income with a dummy variable representing eligibility to each of the Objectives, to examine how it affects the growth performance. In a different way, Esposti and Bussoletti (2008)combine Funds with infrastructure, human capital and (public and private) R&D, arguing that EU transfers affect growth through investment, which in turn is mainly focused in the mentioned areas, in the regions studied.…”

Structural Funds and European Regional Growth: Comparison of Effects among Different Programming Periods

“…Most of the studies, however, get to inconclusive outcomes. Esposti and Bussoletti (2008) and Llussá and Lopes (2014) find limited impacts of Funds over growth. Also, Mohl and Hagen (2010) and Fiaschi et al (2011) unveil the existence of a territorially uneven impact.…”

The role of institutions in shaping geography of development disparities across European Union

“…1 -3), regional growth is used as an outcome variable, following employment and productivity. There are only a few studies analysing the impact of SF payments on regional disparities and while some (Beugelsdijk and Eijffinger 2005, Eggert et al 2007, Llussá and Lopes 2011, Maynou et al 2016, Kyriacou and Roca-Sagalés 2012, Eberle and Brenner 2016 show a positive impact, others (Boldrin and Canova 2001, Ederveen et al 2006, Piętak 2018 do not confirm any effect.…”

“…The impact of Cohesion Policy (CP) has become a subject of intense academic and policy debate since its effects remain controversial. Despite the fact that the ultimate goal of the EU's CP for 2000 -2006 and 2007 -2013 PPs was to diminish existing geographical disparities in terms of development level, only few studies (Boldrin and Canova 2001, Beugelsdijk and Eijffinger 2005, Ederveen et al 2006, Eggert et al 2007, Llussá and Lopes 2011, Kyriacou and Roca-Sagalés 2012, Maynou et al 2016, Eberle and Brenner 2016and Piętak 2018 analyze the effects of Structural funds' (SF) payments in the light of this problem. Studies do not agree whether SF payments contributed to shaping the geography of development in the EU and diminished territorial disparities.…”