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The Effect of Business Support on Employment in Manufacturing: Evidence from the European Union Structural Funds in Germany, Italy and Spain

Author

Listed:
  • Massimo Florio

    (UNIMI - Università degli Studi di Milano = University of Milan)

  • Luigi Moretti,

    (Unipd - Università degli Studi di Padova = University of Padua)

Abstract

This study investigates employment growth in the business activities supported by the European Cohesion Policy. We examine cross-industry, cross-regional variations in a sample of fourteen manufacturing industries and seventy European regions (in Germany, Italy and Spain) and take advantage of detailed European Union Structural Funds data at the regional level for the period 2000–2006. We show that business support is positively associated with higher employment growth in industries that are initially smaller and in those with higher growth opportunities. The results suggest that direct support to businesses by the European Cohesion Policy contributes to the growth process of employment in different industries. Because previous estimated effects at the aggregate level may in fact conceal large differences across industries, we conclude that our empirical analysis contributes to the understanding of how Structural Funds can affect industrial and regional development as well as adjustment paths.

Suggested Citation

  • Massimo Florio & Luigi Moretti,, 2014. "The Effect of Business Support on Employment in Manufacturing: Evidence from the European Union Structural Funds in Germany, Italy and Spain," Post-Print hal-01477152, HAL.
    • Handle: RePEc:hal:journl:hal-01477152
    DOI: 10.1080/09654313.2013.805731
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    Cited by:

    1. Maria Coelho, 2019. "Fiscal Stimulus in a Monetary Union: Evidence from Eurozone Regions," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 67(3), pages 573-617, September.
    2. 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.
    3. Magnus Wiberg, 2015. "The comparative political economy of the location of industry," Canadian Journal of Economics, Canadian Economics Association, vol. 48(1), pages 134-154, February.
    4. Massimo Florio & Julie Pellegrin & Emanuela Sirtori, 2014. "Research intensive clusters and regional innovation systems: a case study of mechatronics in Apulia," Working Papers 201403, CSIL Centre for Industrial Studies.
    5. Arbolino, Roberta & Caro, Paolo Di, 2021. "Can the EU funds promote regional resilience at time of Covid-19? Insights from the Great Recession11We thank the Editors and the four anonymous referees for helpful comments. We also thank Emanuele C," Journal of Policy Modeling, Elsevier, vol. 43(1), pages 109-126.
    6. Chiara Del Bo & Massimo Florio & Silvia Vignetti & Emanuela Sirtori, 2011. "Additionality and regional development: are EU Structural Funds complements or substitutes of national Public Finance?," Working Papers 201101, CSIL Centre for Industrial Studies.
    7. Jana Kolaøíková & Ondøej Dvouletý & Petr Kolaøík, 2018. "Economic performance of the NUTS III Regions in the Czech Republic in the context of entrepreneurship subsidies from the EU Structural Funds," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(1), pages 129-153.
    8. Mindaugas Butkus & Alma Mačiulytė-Šniukienė & Kristina Matuzevičiūtė, 2020. "Mediating Effects of Cohesion Policy and Institutional Quality on Convergence between EU Regions: An Examination Based on a Conditional Beta-Convergence Model with a 3-Way Multiplicative Term," Sustainability, MDPI, vol. 12(7), pages 1-37, April.

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