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Does Financial Support from ERDF and CF Contribute to Convergence in the EU? Empirical Evidence at NUTS 3 Level

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  • Mindaugas Butkus
  • Alma Mačiulytė-Šniukienė
  • Kristina Matuzevičiutė
  • Diana Cibulskienė

Abstract

Analysing papers that reveal by decomposing territorial inequalities in the EU that the share of disparities attributed to the NUTS 3 level has increased over the last 20 years, this paper aims to examine to what extent the financial support in 2000-2006 from ERDF and CF, which are the main regional policy tools but mainly are directed to address the issues arising at the NUTS 2 level, contributed to supporting convergence at the NUTS 3 level. Our re-search strategy relies on combining a conditional β-convergence model and a difference-in-differences (DiD) estimator. Estimations are generated for four alternative post-policy periods, two ways to measure policy intervention and for different funds as well as different expenditure categories. Our research results bring to light the question of potential negative outcomes of the EU's existing regional policy since the policy that is focused on the NUTS 2 level is enlarging imbalances within these regions, i.e., among NUTS 3 regions.

Suggested Citation

  • Mindaugas Butkus & Alma Mačiulytė-Šniukienė & Kristina Matuzevičiutė & Diana Cibulskienė, 2020. "Does Financial Support from ERDF and CF Contribute to Convergence in the EU? Empirical Evidence at NUTS 3 Level," Prague Economic Papers, Prague University of Economics and Business, vol. 2020(3), pages 315-329.
    • Handle: RePEc:prg:jnlpep:v:2020:y:2020:i:3:id:737:p:315-329
    DOI: 10.18267/j.pep.737
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    References listed on IDEAS

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    2. Mindaugas Butkus & Diana Cibulskiene & Alma Maciulyte-Sniukiene & Kristina Matuzeviciute, 2018. "What Is the Evolution of Convergence in the EU? Decomposing EU Disparities up to NUTS 3 Level," Sustainability, MDPI, vol. 10(5), pages 1-37, May.
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    More about this item

    Keywords

    European Regional Development Fund (ERDF); Cohesion Fund (CF); regional disparities; convergence; NUTS 3; financial support;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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