IDEAS home Printed from https://ideas.repec.org/p/ces/econwp/_47.html
   My bibliography  Save this paper

European Structural and Investment Funds and Regional Convergence: The Impact of Public Deficit in Beta-Convergence

Author

Listed:
  • Carlos San Juan Mesonada
  • Carlos Sunyer Manteiga

Abstract

The objective is to empirically assess the effects of the European Structural and Investment Funds (ESIF) on the regional convergence of income catching-up of the Objective 1 regions in Spain. The principal added value of the paper is that by using realized investment data, it allows comparison of the results in terms of real regional convergence of the two budgetary periods covering different phases of the business cycle and two ESIF operational programs. The panel data model’s results allow recommendations to assess economic and financial adjustments in the UE and the use of the ESIF. Changes in economic cycles seem to have a significant impact on the ability of funds to contribute to the growth of the regional economy. Possible use in the Eurozone of the future Crisis Fund of the multiannual budget 2021-27. The level of indebtedness in the region has a definite adverse effect on the effectiveness of European projects. Additionally, we identify an apparent spillover effect from the funds towards other border regions on those that are formally receiving. Therefore, it is essential to be able to adapt the funds according to the phase of the business cycle. Moreover, during the downturns, to ensure their effectiveness may not be co-finance by regions.

Suggested Citation

  • Carlos San Juan Mesonada & Carlos Sunyer Manteiga, 2020. "European Structural and Investment Funds and Regional Convergence: The Impact of Public Deficit in Beta-Convergence," EconPol Working Paper 47, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    • Handle: RePEc:ces:econwp:_47
    as

    Download full text from publisher

    File URL: https://www.ifo.de/DocDL/EconPol_Working_Paper_47_European_Structural_Investment.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sascha O. Becker & Peter H. Egger & Maximilian von Ehrlich, 2013. "Absorptive Capacity and the Growth and Investment Effects of Regional Transfers: A Regression Discontinuity Design with Heterogeneous Treatment Effects," American Economic Journal: Economic Policy, American Economic Association, vol. 5(4), pages 29-77, November.
    2. Andres RodrIguez-Pose & Ugo Fratesi†, 2004. "Between Development and Social Policies: The Impact of European Structural Funds in Objective 1 Regions," Regional Studies, Taylor & Francis Journals, vol. 38(1), pages 97-113.
    3. Rodríguez-Pose, Andrés & Novak, Katja, 2013. "Learning processes and economic returns in European Cohesion policy," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 25, pages 1-20.
    4. Sandy Dall'erba & Julie Le Gallo, 2008. "Regional convergence and the impact of European structural funds over 1989–1999: A spatial econometric analysis," Papers in Regional Science, Wiley Blackwell, vol. 87(2), pages 219-244, June.
    5. Becker, Sascha O. & Egger, Peter H. & von Ehrlich, Maximilian, 2012. "Too much of a good thing? On the growth effects of the EU's regional policy," European Economic Review, Elsevier, vol. 56(4), pages 648-668.
    6. Andr�s Rodr�guez-Pose & Enrique Garcilazo, 2015. "Quality of Government and the Returns of Investment: Examining the Impact of Cohesion Expenditure in European Regions," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1274-1290, August.
    7. Quah, D., 1990. "Galton'S Fallacy And The Tests Of The Convergence Hypothesis," Working papers 552, Massachusetts Institute of Technology (MIT), Department of Economics.
    8. Luigi Bonatti & Andrea Fracasso, 2017. "Addressing the Core-Periphery Imbalances in Europe: Resource Misallocation and Expansionary Fiscal Policies," EconPol Working Paper 6, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    9. George Georgescu, 2008. "Determinants Of Increasing Eu Funds Absorption Capacity In Romania," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(10), pages 1-16.
    10. Olivier J. Blanchard & Daniel Leigh, 2013. "Growth Forecast Errors and Fiscal Multipliers," American Economic Review, American Economic Association, vol. 103(3), pages 117-120, May.
    11. Fabrizio Barca & Philip McCann & Andrés Rodríguez‐Pose, 2012. "The Case For Regional Development Intervention: Place‐Based Versus Place‐Neutral Approaches," Journal of Regional Science, Wiley Blackwell, vol. 52(1), pages 134-152, February.
    12. Sjef Ederveen & Henri L.F. de Groot & Richard Nahuis, 2006. "Fertile Soil for Structural Funds?A Panel Data Analysis of the Conditional Effectiveness of European Cohesion Policy," Kyklos, Wiley Blackwell, vol. 59(1), pages 17-42, February.
    13. Roberto Esposti & Stefania Bussoletti, 2008. "Impact of Objective 1 Funds on Regional Growth Convergence in the European Union: A Panel-data Approach," Regional Studies, Taylor & Francis Journals, vol. 42(2), pages 159-173.
    14. Marco Di Cataldo & Vassilis Monastiriotis, 2020. "Regional needs, regional targeting and regional growth: an assessment of EU Cohesion Policy in UK regions," Regional Studies, Taylor & Francis Journals, vol. 54(1), pages 35-47, January.
    15. Sjef Ederveen & Henri L.F. de Groot & Richard Nahuis, 2002. "Fertile Soil for Structural Funds?," Tinbergen Institute Discussion Papers 02-096/3, Tinbergen Institute.
    16. Varga, Janos & in 't Veld, Jan, 2011. "A model-based analysis of the impact of Cohesion Policy expenditure 2000–06: Simulations with the QUEST III endogenous R&D model," Economic Modelling, Elsevier, vol. 28(1), pages 647-663.
    17. Becker, Sascha O. & Egger, Peter H. & von Ehrlich, Maximilian, 2010. "Going NUTS: The effect of EU Structural Funds on regional performance," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 578-590, October.
    18. Riccardo Crescenzi & Ugo Fratesi & Vassilis Monastiriotis, 2020. "Back to the member states? Cohesion Policy and the national challenges to the European Union," Regional Studies, Taylor & Francis Journals, vol. 54(1), pages 5-9, January.
    19. Sjef Ederveen & Henri L.F. de Groot & Richard Nahuis, 2006. "Fertile Soil for Structural Funds?A Panel Data Analysis of the Conditional Effectiveness of European Cohesion Policy," Kyklos, Wiley Blackwell, vol. 59(1), pages 17-42, February.
    20. Jan in 't Veld & Janos Varga, 2010. "The Potential Impact of EU Cohesion Policy Spending in the 2007-13 Programming Period: A Model-Based," European Economy - Economic Papers 2008 - 2015 422, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    21. Óscar Rodil & Xavier Vence & María del Carmen Sánchez, 2014. "Disparidades en la Eurozona: el debate de la convergencia regional a la luz de las asimetrías en la estructura productiva," EKONOMIAZ. Revista vasca de Economía, Gobierno Vasco / Eusko Jaurlaritza / Basque Government, vol. 86(02), pages 274-305.
    22. Alexandra Sotiriou & Maria Tsiapa, 2015. "The asymmetric influence of structural funds on regional growth in Greece," Environment and Planning C, , vol. 33(4), pages 863-881, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carlos San Juan Mesonada & Carlos Sunyer Manteiga, 2021. "European Structural Funds and Resilient and Recovery Facility Governance," EconPol Working Paper 67, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Panagiotis KOUDOUMAKIS & George BOTZORIS & Angelos PROTOPAPAS, 2021. "The Contribution Of Cohesion Policy To The Development And Convergence Of The Regions Of The European Union," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 277-290, June.
    2. Elena Calegari & Enrico Fabrizi & Gianni Guastella & Francesco Timpano, 2021. "EU regional convergence in the agricultural sector: Are there synergies between agricultural and regional policies?," Papers in Regional Science, Wiley Blackwell, vol. 100(1), pages 23-50, February.
    3. Paolo Di Caro & Ugo Fratesi, 2022. "One policy, different effects: Estimating the region‐specific impacts of EU cohesion policy," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 307-330, January.
    4. Mindaugas Butkus & Alma Maciulyte-Sniukiene & Kristina Matuzeviciute, 2020. "Heterogeneous growth outcomes of the EU’s regional financial support mediated by institutions with some empirical evidences at NUTS 3 level," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 40(1), pages 33-66, April.
    5. Carlos San Juan Mesonada & Carlos Sunyer Manteiga, 2021. "European Structural Funds and Resilient and Recovery Facility Governance," EconPol Working Paper 67, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    6. Albanese, Giuseppe & Carrieri, Vincenzo & Speziali, Maria Maddalena, 2021. "Looking for a Star: Evaluating the Effect of the Cohesion Policy on Regional Well-Being," IZA Discussion Papers 14521, Institute of Labor Economics (IZA).
    7. Cerciello, Massimiliano & Agovino, Massimiliano & Garofalo, Antonio, 2019. "The caring hand that cripples? The effects of the European regional policy on local labour market participation in Southern Italy," Socio-Economic Planning Sciences, Elsevier, vol. 68(C).
    8. Mindaugas Butkus & Alma Maciulyte-Sniukiene & Renata Macaitiene & Kristina Matuzeviciute, 2021. "A New Approach to Examine Non-Linear and Mediated Growth and Convergence Outcomes of Cohesion Policy," Economies, MDPI, vol. 9(3), pages 1-28, July.
    9. Filip Hruza & Stanislav Volcík & Jan Žácek, 2019. "The Impact of EU Funds on Regional Economic Growth of the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 69(1), pages 76-94, February.
    10. Marco Di Cataldo, 2016. "Gaining and losing EU Objective 1 funds: Regional development in Britain and the prospect of Brexit," LEQS – LSE 'Europe in Question' Discussion Paper Series 120, European Institute, LSE.
    11. Davide Fiaschi & Andrea Mario Lavezzi & Angela Parenti, 2018. "Does EU cohesion policy work? Theory and evidence," Journal of Regional Science, Wiley Blackwell, vol. 58(2), pages 386-423, March.
    12. Gianluigi Coppola & Sergio Destefanis & Giorgia Marinuzzi & Walter Tortorella, 2021. "Regional policies and sectoral outputs in the Italian regions. A multi-input multi-output counterfactual approach," Discussion Paper series in Regional Science & Economic Geography 2021-08, Gran Sasso Science Institute, Social Sciences, revised May 2021.
    13. Enrico Fabrizi & Gianni Guastella & Stefano Marta & Francesco Timpano, 2016. "Determinants of Intra-Distribution Dynamics in European Regions: An Empirical Assessment of the Role of Structural Intervention," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 107(5), pages 522-539, December.
    14. Marco Di Cataldo & Vassilis Monastiriotis, 2018. "An assessment of EU Cohesion Policy in the UK regions: direct effects and the dividend of targeting," LEQS – LSE 'Europe in Question' Discussion Paper Series 135, European Institute, LSE.
    15. Lukasz Pietak, 2021. "Structural Funds and Convergence in Poland," Hacienda Pública Española / Review of Public Economics, IEF, vol. 236(1), pages 3-37, March.
    16. Sergio Destefanis & Valter Di Giacinto, 2022. "EU structural funds and GDP per capita: Spatial VAR evidence for the European regions," Discussion Paper series in Regional Science & Economic Geography 2022-09, Gran Sasso Science Institute, Social Sciences, revised Oct 2024.
    17. Cerqua, Augusto & Pellegrini, Guido, 2018. "Local policy effects at a time of economic crisis," MPRA Paper 85621, University Library of Munich, Germany.
    18. Constantin M. PROFIROIU & Alina G. PROFIROIU & Corina C. NASTACĂ, 2019. "The Effectiveness Of The Regional Operational Programme Implementation On The Resilience Of The Romanian Counties," EURINT, Centre for European Studies, Alexandru Ioan Cuza University, vol. 6, pages 36-54.
    19. Ferraro, Aniello & Cerciello, Massimiliano & Agovino, Massimiliano & Garofalo, Antonio, 2021. "Do public policies reduce social exclusion? The role of national and supranational economic tools," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 165-181.
    20. Andrés Rodríguez-Pose & Lewis Dijkstra, 2021. "Does Cohesion Policy reduce EU discontent and Euroscepticism?," Regional Studies, Taylor & Francis Journals, vol. 55(2), pages 354-369, February.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:econwp:_47. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/ifooode.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.