IDEAS home Printed from https://ideas.repec.org/p/cns/cnscwp/202412.html
   My bibliography  Save this paper

EU funds and TFP growth: how the impact changed over time and space

Author

Listed:
  • F. Aresu
  • E. Marrocu
  • R. Paci

Abstract

This paper investigates the economic impact of European Structural and Investment Funds (ESIF) for 262 EU NUTS2 regions over the period 2000-2019. Differently from previous contributions, we focus on the impact of ESIF on regional Total Factor Productivity (TFP) growth, which allowed us to account for other sources of regional investments. A relevant contribution of this study is the thorough examination of the effect of the four main funds included in ESIF on the productivity of a comprehensive set of EU regions. Results show the prevailing effectiveness of the European Regional Development Fund (ERDF), featuring a great deal of heterogeneity over time and across EU geographic areas. Moreover, by analyzing the role played by the European Agricultural Fund (EAFRD) on the TFP of the agricultural sector, we found that its growth impact crucially depends on the initial level of regional sectoral TFP. Our results contribute to a deeper understanding of ESIF economic impact and suggest policy implications for enhancing their contribution to regional economic development.

Suggested Citation

  • F. Aresu & E. Marrocu & R. Paci, 2024. "EU funds and TFP growth: how the impact changed over time and space," Working Paper CRENoS 202412, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    • Handle: RePEc:cns:cnscwp:202412
    as

    Download full text from publisher

    File URL: https://crenos.unica.it/crenos/node/8581
    Download Restriction: no
    File URL: https://crenos.unica.it/crenos/sites/default/files/wp-24-12.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. 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.
    3. Riccardo Crescenzi & Mara Giua, 2020. "One or many Cohesion Policies of the European Union? On the differential economic impacts of Cohesion Policy across member states," Regional Studies, Taylor & Francis Journals, vol. 54(1), pages 10-20, January.
    4. Andreas Diemer & Simona Iammarino & Andrés Rodríguez-Pose & Michael Storper, 2022. "The Regional Development Trap in Europe," Economic Geography, Taylor & Francis Journals, vol. 98(5), pages 487-509, October.
    5. Giuseppe Albanese & Guido de Blasio & Andrea Locatelli, 2021. "Does EU regional policy promote local TFP growth? Evidence from the Italian Mezzogiorno," Papers in Regional Science, Wiley Blackwell, vol. 100(2), pages 327-348, April.
    6. 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.
    7. 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.
    8. Emanuele Ciani & Guido de Blasio, 2015. "European structural funds during the crisis: evidence from Southern Italy," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-31, December.
    9. Sandy Dall'Erba & Fang Fang, 2017. "Meta-analysis of the impact of European Union Structural Funds on regional growth," Regional Studies, Taylor & Francis Journals, vol. 51(6), pages 822-832, June.
    10. Emanuela Marrocu & Raffaele Paci & Stefano Usai, 2013. "Productivity Growth In The Old And New Europe: The Role Of Agglomeration Externalities," Journal of Regional Science, Wiley Blackwell, vol. 53(3), pages 418-442, August.
    11. Mussida, Chiara & Parisi, Maria Laura & Pontarollo, Nicola, 2023. "Severity of material deprivation in Spanish regions and the role of the European Structural Funds," Socio-Economic Planning Sciences, Elsevier, vol. 88(C).
    12. Barbara Dettori & Emanuela Marrocu & Raffaele Paci, 2012. "Total Factor Productivity, Intangible Assets and Spatial Dependence in the European Regions," Regional Studies, Taylor & Francis Journals, vol. 46(10), pages 1401-1416, November.
    13. Emanuela Marrocu & Raffaele Paci & Stefano Usai, 2022. "Direct and indirect effects of universities on European regional productivity," Papers in Regional Science, Wiley Blackwell, vol. 101(5), pages 1105-1133, October.
    14. Cristian Incaltarau & Gabriela Carmen Pascariu & Neculai‐Cristian Surubaru, 2020. "Evaluating the Determinants of EU Funds Absorption across Old and New Member States – the Role of Administrative Capacity and Political Governance," Journal of Common Market Studies, Wiley Blackwell, vol. 58(4), pages 941-961, July.
    15. Marco Percoco, 2017. "Impact of European Cohesion Policy on regional growth: does local economic structure matter?," Regional Studies, Taylor & Francis Journals, vol. 51(6), pages 833-843, June.
    16. Julia Bachtrögler & Ugo Fratesi & Giovanni Perucca, 2020. "The influence of the local context on the implementation and impact of EU Cohesion Policy," Regional Studies, Taylor & Francis Journals, vol. 54(1), pages 21-34, January.
    17. Aadne Cappelen & Fulvio Castellacci & Jan Fagerberg & Bart Verspagen, 2003. "The Impact of EU Regional Support on Growth and Convergence in the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 41(4), pages 621-644, September.
    18. 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.
    19. repec:bla:jcmkts:v:41:y:2003:i::p:621-644 is not listed on IDEAS
    20. Anselin, Luc & Bera, Anil K. & Florax, Raymond & Yoon, Mann J., 1996. "Simple diagnostic tests for spatial dependence," Regional Science and Urban Economics, Elsevier, vol. 26(1), pages 77-104, February.
    21. Anabela Santos & John Edwards & Paulo Neto, 2023. "Does Smart Specialisation improve any innovation subsidy effect on regional productivity? The Portuguese case," European Planning Studies, Taylor & Francis Journals, vol. 31(4), pages 758-779, April.
    22. Guido Pellegrini & Flavia Terribile & Ornella Tarola & Teo Muccigrosso & Federica Busillo, 2013. "Measuring the effects of European Regional Policy on economic growth: A regression discontinuity approach," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 217-233, March.
    23. Luisa Gagliardi & Marco Percoco, 2017. "The impact of European Cohesion Policy in urban and rural regions," Regional Studies, Taylor & Francis Journals, vol. 51(6), pages 857-868, June.
    Full references (including those not matched with items on IDEAS)

    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. 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.
    2. 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.
    3. Sergio Destefanis & Valter Di Giacinto, 2023. "EU structural funds and GDP per capita: spatial VAR evidence for the European regions," Temi di discussione (Economic working papers) 1409, Bank of Italy, Economic Research and International Relations Area.
    4. Fusaro, Stefano & Scandurra, Rosario, 2023. "The impact of the European social fund on youth education and employment," Socio-Economic Planning Sciences, Elsevier, vol. 88(C).
    5. Julia Bachtrögler & Christoph Hammer & Wolf Heinrich Reuter & Florian Schwendinger, 2019. "Guide to the galaxy of EU regional funds recipients: evidence from new data," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(1), pages 103-150, February.
    6. 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.
    7. Cerqua, Augusto & Pellegrini, Guido, 2018. "Local policy effects at a time of economic crisis," MPRA Paper 85621, University Library of Munich, Germany.
    8. Bachtrögler-Unger, Julia & Dolls, Mathias & Krolage, Carla & Schüle, Paul & Taubenböck, Hannes & Weigand, Matthias, 2023. "EU cohesion policy on the ground: Analyzing small-scale effects using satellite data," Regional Science and Urban Economics, Elsevier, vol. 103(C).
    9. 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.
    10. 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).
    11. Francesco Cappellano & Francesco Molica & Teemu Makkonen, 2024. "Missions and Cohesion Policy: is there a match?," Science and Public Policy, Oxford University Press, vol. 51(3), pages 360-374.
    12. Scotti, Francesco & Flori, Andrea & Pammolli, Fabio, 2022. "The economic impact of structural and Cohesion Funds across sectors: Immediate, medium-to-long term effects and spillovers," Economic Modelling, Elsevier, vol. 111(C).
    13. Di Stefano, Roberta & Resce, Giuliano, "undated". "The Determinants of Missed Funding: Predicting the Paradox of Increased Need and Reduced Allocation," Economics & Statistics Discussion Papers esdp23092, University of Molise, Department of Economics.
    14. Augusto Cerqua & Guido Pellegrini, 2023. "I will survive! The impact of place-based policies when public transfers fade out," Regional Studies, Taylor & Francis Journals, vol. 57(8), pages 1605-1618, August.
    15. Ganau, Roberto & Kilroy, Austin, 2023. "Detecting economic growth pathways in the EU’s lagging regions," LSE Research Online Documents on Economics 115162, London School of Economics and Political Science, LSE Library.
    16. 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.
    17. Kilroy,Austin Francis Louis & Ganau,Roberto, 2020. "Economic Growth in European Union NUTS-3 Regions," Policy Research Working Paper Series 9494, The World Bank.
    18. Giua, Mara & Hoxhaj, Rezart & Pierucci, Eleonora, 2022. "Inclusive Europe: the impact of the EU Cohesion Policy on immigrants’ economic integration in Italy," Journal of Policy Modeling, Elsevier, vol. 44(3), pages 532-549.
    19. 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.
    20. 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).

    More about this item

    Keywords

    regional development; Spatial Error Model; European Union; European Structural and Investment Funds;
    All these keywords.

    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:cns:cnscwp:202412. 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: CRENoS (email available below). General contact details of provider: https://edirc.repec.org/data/crenoit.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.