Information Asymmetry in the European Funds Market: Impact on Resource Allocation and Sustainable Development

Brenda-Andreea Piuaru, Bianca Tescașiu, Gheorghe Epuran, Mihaela Hrisanta Mosora and Ioana Simona Ivasciuc
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Brenda-Andreea Piuaru: Faculty of Economic Sciences and Business Administration, Transilvania University of Brașov, 500036 Brașov, Romania
Bianca Tescașiu: Faculty of Economic Sciences and Business Administration, Transilvania University of Brașov, 500036 Brașov, Romania
Gheorghe Epuran: Faculty of Economic Sciences and Business Administration, Transilvania University of Brașov, 500036 Brașov, Romania
Mihaela Hrisanta Mosora: Faculty of Theoretical and Applied Economics, Bucharest University of Economic Studies, 010374 București, Romania
Ioana Simona Ivasciuc: Faculty of Economic Sciences and Business Administration, Transilvania University of Brașov, 500036 Brașov, Romania

Sustainability, 2024, vol. 16, issue 24, 1-30

Abstract: The European Funds market is a key mechanism for fostering regional development and economic growth within the European Union, yet its efficiency can be undermined by information asymmetry, which complicates fund absorption processes. This paper investigates the European Funds market and explores how adverse selection and moral hazard impact the dynamics of the fund allocation. Through qualitative research, the authors assess the European Funds market, identify its key stakeholders, and explore factors influencing funds absorption. Findings reveal complex interactions among European Union institutions, managing authorities, beneficiaries, and consultants. The research highlights economic, administrative, institutional, and social factors that affect fund absorption rates and pinpoint adverse selection and moral hazard as primary consequences of information asymmetry in the European Funds market. By emphasizing the importance of effective communication processes and describing the experiences of various actors in European-funded projects, the study provides actionable insights for policymakers and stakeholders. This paper offers a new perspective on the European Funds market and links information asymmetry to inefficiencies in fund allocation. These findings contribute to a better understanding of the European Funds market, fostering transparency, enhancing institutional capacities, and promoting sustainability in the governance of public funds.

Keywords: European Funds market; information asymmetry; communication processes; sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:16:y:2024:i:24:p:11101-:d:1546781

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