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Regional Growth in Europe: The Role of European and National Policies

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Listed:
  • Fernanda Llussa
  • Jose Mario Lopes

Abstract

We conduct a systematic study of the impact of European Union (EU) regional policies on regional economic growth that controls for national policies and geographic characteristics. Special care is taken in distinguishing between the impact of EU policies and of national policies on economic growth. Our empirical study tries to answer two different questions. First, is there convergence across EU regions, and if so, do regions converge to a common European steady-state or to a national one? Second, how do European and national policies affect regional growth? We find evidence of regional convergence at the national level but not at the European level. In addition we find that trade openness at the national level is associated with regional convergence while European regional policies contribute, though weakly, to regional convergence. Our results suggest that policies that foster market integration – and convergence to a common steady-state - such as the promotion of labour and capital movements across countries and common regulatory policies are as important for European-wide regional convergence as regional structural funds.

Suggested Citation

  • Fernanda Llussa & Jose Mario Lopes, 2011. "Regional Growth in Europe: The Role of European and National Policies," Nova SBE Working Paper Series wp554, Universidade Nova de Lisboa, Nova School of Business and Economics.
    • Handle: RePEc:unl:unlfep:wp554
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    File URL: https://run.unl.pt/bitstream/10362/11171/1/wp554.pdf
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    References listed on IDEAS

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    1. Sala-i-Martin, Xavier X., 1996. "Regional cohesion: Evidence and theories of regional growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1325-1352, June.
    2. de la Fuente, Angel, 2002. "On the sources of convergence: A close look at the Spanish regions," European Economic Review, Elsevier, vol. 46(3), pages 569-599, March.
    3. Button, Kenneth J & Pentecost, Eric J, 1995. "Testing for Convergence of the EU Regional Economies," Economic Inquiry, Western Economic Association International, vol. 33(4), pages 664-671, October.
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    Cited by:

    1. Carlos Pinho & Celeste Varum & Micaela Antunes, 2013. "Structural funds and regional growth: conditions for improving efficiency," Economics and Business Letters, Oviedo University Press, vol. 2(4), pages 143-149.

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    More about this item

    Keywords

    National Policies; European Union Policies; regional growth;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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