EU funds and TFP growth: how the impact changed over time and space

Raffaele Paci, Emanuela Marrocu and Federico Aresu

Working Paper CRENoS from Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia

Abstract: This paper investigates the economic impact of European Structural and Investment Funds (ESIF) for 262 EU NUTS2 regions over the period 2000-2019. Differently from previous contributions, we focus on the impact of ESIF on regional Total Factor Productivity (TFP) growth, which allowed us to account for other sources of regional investments. A relevant contribution of this study is the thorough examination of the effect of the four main funds included in ESIF on the productivity of a comprehensive set of EU regions. Results show the prevailing effectiveness of the European Regional Development Fund (ERDF), featuring a great deal of heterogeneity over time and across EU geographic areas. Moreover, by analyzing the role played by the European Agricultural Fund (EAFRD) on the TFP of the agricultural sector, we found that its growth impact crucially depends on the initial level of regional sectoral TFP. Our results contribute to a deeper understanding of ESIF economic impact and suggest policy implications for enhancing their contribution to regional economic development.

Keywords: Spatial Error Model; regional development; European Union; European Structural and Investment Funds (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-eec, nep-eff, nep-fdg, nep-geo, nep-sbm and nep-ure
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https://crenos.unica.it/crenos/node/8581
https://crenos.unica.it/crenos/sites/default/files/wp-24-12.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cns:cnscwp:202412

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