Productivity Dynamics across European Regions: the Impact of Structural and Cohesion Funds

Andrea Mario Lavezzi and Angela Parenti Davide Fiaschi
Authors registered in the RePEc Author Service: Andrea Mario Lavezzi (), Davide Fiaschi () and Angela Parenti ()

Discussion Papers from Dipartimento di Scienze Economiche (DSE), University of Pisa, Pisa, Italy

Abstract: This paper analyzes the impact of the European Union regional policy of the three programming periods 1975-1988, 1989-1993 and 1994-1999 on the dynamics of productivity of European regions. On average, funding had a positive, but concave, effect on productivity growth. In particular, a share of funds on GVA of 10% GVA is estimated to raise the regional growth rate of about 0.9% per year. However, by separately considering the three programming periods and the composition of the funds according to the objectives defined by the EU, we find that: i) only the funds allocated in the second and third programming periods, when they remarkably increased, had a significant impact; and ii) only Objective 1 and Cohesion funds played a significantly positive impact, while funds devoted to Objectives 2, 3, 4 and 5 had a negative or non significant impact. The results are robust to potential endogeneity of funds and spatial dependence.

Keywords: European regional policy; structural change; convergence; European regions. (search for similar items in EconPapers)
JEL-codes: C21 E62 R11 O52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-eff and nep-geo
Date: 2009-06-19
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Persistent link: http://EconPapers.repec.org/RePEc:pie:dsedps:2009/84

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