The Impact of Structural Funds on Regional Growth: A Panel Data Spatial Analysis
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DOI: 10.1007/s10272-020-0921-1
Micaela Antunes, Miguel Viegas, Celeste Varum and Carlos Pinho
The Impact of Structural Funds on Regional Growth: A Panel Data Spatial Analysis The European Union is one of the most prosperous areas of the world. However, huge disparities remain among its member states and regions. Given the persistence of those large regional inequalities, it is pertinent to analyse the efficiency of structural funds. In light of the neoclassical theory, these funds should contribute to improving the economic efficiency among the poorest regions, promoting regional convergence. However, the new economic geography states that structural funds may also facilitate the geographic concentration of economic activities, thus perpetuating regional imbalances. This article measures the impact of structural funds on regional convergence using a spatial econometric approach applied to an extended sample of European regions across a long time interval. Based on data for 96 EU regions during the period 1995-2009, a Durbin model with panel data is estimated in order to capture the effects of spatial dependence in both the lagged dependent variable and the independent variables. The results confirm the existence of conditional convergence and the importance of neighbourhood and spillover effects but do not detect the existence of positive impacts from structural funds.
Although the European Union is one of the most prosperous areas of the world, huge disparities remain among its member states and regions. With the entry of new members in 2004, this disparity increased significantly. In this sense, the economic and social cohesion became a fundamental objective of the EU, implying mechanisms of solidarity between regions.
© The Author(s) 2020. Open Access: This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (https://creativecommons.org/licenses/by/4.0/). Open Access funding provided by ZBW – Leibniz Information Centre for Economics.
Micaela Antunes, Centre for Business and Economics Research, University of Coimbra, Portugal. Miguel Viegas, GOVCOPP, University of Aveiro, Portugal. Celeste Varum, GOVCOPP, University of Aveiro, Portugal. Carlos Pinho, GOVCOPP, University of Aveiro, Portugal.
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Regional imbalances were mentioned in the Treaty of Rome, founding the European Economic Community in 1957. However, the first fund to finance explicitly regional cohesion policies began in 1975 with the creation of the European Regional Development Fund. Later, in 1993, the Cohesion Fund was created to finance investment in the field of environment and transport networks in countries with GNP per inhabitant of less than 90% of the EU average (Hooghe, 1996). Since then, the financial envelope for the structural funds has increased, representing approximately €350 billion in the Community Support Framework 2007-2013 and €336 billion for the programming period 2014-2020 (about 33% the overall EU budget). These funds are designed to support the goal of convergence, benefiting m
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