Alexander Lembcke (p), Julia Bachtrögler

Tina Wallin

This paper evaluates the emphasis of EU Cohesion Policy on small and medium-sized enterprises (SME) formulated in the ‘Community strategic guidelines on cohesion’ (European Council 2006) for the programming period 2007-2013. I.e., we investigate whether this focus was actually put into practice in European regions and whether it was advantageous to do so. A comparison of the effects of co-funding projects in SMEs and larger firms for a sample 80 NUTS-2 regions in 9 EU member states reveals that smaller supported firms generate more employment (growth), real gross output and multi-factor productivity growth. This holds to be true on average also when we distinguish firms in the manufacturing and services sector.
Still, we are interested in regional differences in the extent of the effect on small firms’ performance across European NUTS-2 regions. The analysis shows that higher regional institutional quality interferes with the cohesion policy by increasing its firm-level effects. Moreover, firms that are more credit-constrained or are located in a region with a more important manufacturing sector, benefit more from carrying out co-funded projects.

Emanuela Marrocu (p), Stefano Usai, Raffaele Brancati, Manuel Romagnoli

Alexander Lembcke

In this paper we study Italian firms’ behaviour in terms of international and inter-regional trade activities during recent years with the aim of detecting similarities and differences in trade patterns in order to shed some light on the determinants of these two types of firm strategies. In particular, we single out the role of sunk costs, innovative activities and learning abilities on firm’s strategies for selling beyond their neighbouring markets. The analysis is carried out within the framework of dynamic probability panel models and makes use of a very rich micro-level dataset based on MET surveys for the period 2007-2013. These surveys are specifically designed to study Italian firms’ characteristics and strategies, with particular focus on inter and intra national relationships and networks. Main results, while confirming the relevant role played by firms’ productivity, provide new evidence on the relevance of innovation activity and learning processes in enhancing the probability of entering both international and interregional markets. Our findings also show that the determinants of the firms’ propensity to trade exhibit varying effects across the macro-regions of the country: firms located in the northern regions have to cope with smaller sunk costs than the ones located either in the Centre of Italy or in the Mezzogiorno area. This implies that trade activities are more persistent outside northern regions. These results can be particularly relevant if we consider that the overall dimension of sunk costs is much lower in the case of interregional trade if compared with the international trade ones. Thus, regional policies oriented to tackle this path dependence are more necessary in some areas rather than others.

See document "BMRU_ERSA2018.pdf" with the full paper.

Tina Wallin (p), Lina Bjerke , Mikaela Backman

Emanuela Marrocu

see extended abstract