Does European Cohesion Policy affect Regional Business Dynamics?

Marcos Aurelio Díaz Ramírez (), Lukas Kleine-Rueschkamp () and Paolo Veneri
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Marcos Aurelio Díaz Ramírez: Organisation for Economic Co-operation and Development
Lukas Kleine-Rueschkamp: Organisation for Economic Co-operation and Development

INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, 2023, issue 57, 5-31

Abstract: This paper assesses whether European Cohesion Policy funds from the 2007 2013 programming period affected business dynamics in European regions. Using a regression discontinuity approach, the analysis shows that regions receiving more funds experienced higher firm births, without statistically significant firm deaths, resulting in positive net firm creation and growing firm-related employment. In addition, this study confirms previous findings in the literature according to which regions receiving more funds show higher increases in gross value added per worker. Finally, funds have a significantly higher effect on net business employment creation in regions with lower levels of perceived corruption, although this is not necessarily conductive to higher levels of labour productivity in those regions.

Keywords: Regional Policy; cohesion funds; business dynamics (search for similar items in EconPapers)
JEL-codes: C31 R11 R15 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ris:invreg:0513

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