Cohesion or collusion? EU funds in places with corrupt local institutions

Martina Pardy and Andrés Rodríguez-Pose
Authors registered in the RePEc Author Service: Andrés Rodríguez-Pose

No 2511, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: This paper analyses how trade influences intra-regional income inequality across Europe’s NUTS-2 regions. Drawing on newly compiled datasets capturing both inter-regional trade and local-level inequality for all EU member states plus the UK, we employ an econometric framework —complete with Instrumental Variable estimations and robust sensitivity analyses— to gauge the impact of trade on regional interpersonal inequality. In addition to examining aggregate trade, we distinguish between various trade channels, including exchanges within the EU versus those with the rest of the world, links to neighbouring regions versus non-neighbours, and domestic versus international flows. Our findings reveal that higher levels of trade are positively associated with changes in regional income inequality, as measured by the Gini coefficient. Crucially, this link depends on trading partners: trade within a single country, within the EU, and with non-neighbouring regions correlates with rising inequality, whereas international trade, trade with non-EU partners, or trade with neighbouring regions shows no statistically significant effect. These conclusions withstand a battery of robustness checks, including new control variables and a population-weighted approach, further underscoring the role that particular types of trade play in shaping regional income disparities.

Keywords: Trade; interpersonal inequality; regions; Europe (search for similar items in EconPapers)
JEL-codes: D63 F14 R13 (search for similar items in EconPapers)
Date: 2025-05, Revised 2025-05
New Economics Papers: this item is included in nep-eec and nep-eur
References: Add references at CitEc
Citations:

Downloads: (external link)
http://econ.geo.uu.nl/peeg/peeg2511.pdf Version May 2025 (application/pdf)

Related works:
Working Paper: Cohesion or collusion? EU funds in places with corrupt local institutions (2025)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:egu:wpaper:2511

Access Statistics for this paper

More papers in Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).