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Productivity Dynamics across European Regions: the Impact of Structural and Cohesion Funds

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  • Davide Fiaschi
  • Andrea Mario Lavezzi
  • Angela Parenti

Abstract

This paper analyzes the impact of the European Union regional policy of the three programming periods 1975-1988, 1989-1993 and 1994-1999 on the dynamics of productivity of European regions. On average, funding had a positive, but concave, effect on productivity growth. In particular, a share of funds on GVA of 10% GVA is estimated to raise the regional growth rate of about 0.9% per year. However, by separately considering the three programming periods and the composition of the funds according to the objectives defined by the EU, we find that: i) only the funds allocated in the second and third programming periods, when they remarkably increased, had a significant impact; and ii) only Objective 1 and Cohesion funds played a significantly positive impact, while funds devoted to Objectives 2, 3, 4 and 5 had a negative or non significant impact. The results are robust to potential endogeneity of funds and spatial dependence.

Suggested Citation

  • Davide Fiaschi & Andrea Mario Lavezzi & Angela Parenti, 2009. "Productivity Dynamics across European Regions: the Impact of Structural and Cohesion Funds," Discussion Papers 2009/84, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    • Handle: RePEc:pie:dsedps:2009/84
    Note: ISSN 2039-1854
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    File URL: https://www.ec.unipi.it/documents/Ricerca/papers/2009-84.pdf
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    Cited by:

    1. Adriana Z. F. C. Nishimura & Ana Moreira & Manuel Au-Yong-Oliveira & Maria José Sousa, 2021. "Effectiveness of the Portugal 2020 Programme: A Study from the Citizens’ Perspective," Sustainability, MDPI, vol. 13(11), pages 1-21, May.
    2. Davide Fiaschi & Andrea Mario Lavezzi & Angela Parenti, 2009. "Counterfactual Distribution Dynamics across European Regions," Discussion Papers 2009/85, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    3. Luciano Fanti & Luca Gori, 2012. "Endogenous Lifetime in an Overlapping-Generations Small Open Economy," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 68(2), pages 121-152, June.
    4. Manuela Gussoni & Andrea Mangani, 2012. "The Impact of Public Funding for Innovation on Firms' R&D Investments: Do R&D Cooperation and Appropriability Matter?," L'industria, Società editrice il Mulino, issue 2, pages 237-254.
    5. Carlos Pinho & Celeste Varum & Micaela Antunes, 2015. "Structural Funds and European Regional Growth: Comparison of Effects among Different Programming Periods," European Planning Studies, Taylor & Francis Journals, vol. 23(7), pages 1302-1326, July.
    6. Massimo FLORIO & Luigi MORETTI, 2009. "The effect of business support on employment in manufacturing: evidence from the EU structural funds in Germany, Italy, and Spain," Departmental Working Papers 2009-33, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    7. Castellani, Davide & Pieri, Fabio, 2013. "R&D offshoring and the productivity growth of European regions," Research Policy, Elsevier, vol. 42(9), pages 1581-1594.
    8. 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.
    9. Davide Castellani & Fabio Pieri, 2016. "Outward Investments and Productivity: Evidence from European Regions," Regional Studies, Taylor & Francis Journals, vol. 50(12), pages 1945-1964, December.
    10. Remeikiene Rita & Gaspareniene Ligita, 2016. "Evaluation of the Impact of the EU Structural Support on the Competitiveness of Lithuanian Economics," Central European Journal of Public Policy, Sciendo, vol. 10(1), pages 1-11, May.

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    More about this item

    Keywords

    European regional policy; structural change; convergence; European regions.;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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