Ilias Kostarakos (p), Anabela Marques Santos, Andrea Conte

Susana Suárez

The effectiveness of the European Structural and Investment Funds (ESIF), the EU’s main financing tool for alleviating regional disparities and promoting regional economic development and convergence, has been the subject of intense debate among policymakers and academics alike. Interestingly enough, there is still no consensus regarding the overall efficacy of the structural funds, with a number of studies providing evidence of strong positive effects (e.g. Fidrmuc et al. (2019), Mohl and Hagen (2010) and Pinho et al. (2015)), while others do not seem to corroborate this conclusion. Moreover, recent contributions have placed emphasis on the issue of heterogeneity in terms of the region-specific impact of Cohesion policy (see, e.g. Di Caro and Fratesi (2021)).

This paper aims to shed new light on the issue of the structural funds effectiveness by employing recently developed panel time series econometrics techniques. This approach, building on the so-called unobserved common factor framework (see Pesaran (2006), Chudik and Pesaran (2015) and Chudik et al. (2016)), is able to tackle a number of methodological issues already identified in the literature (e.g. see Pienkowski and Berkowitz (2015)). In particular, this approach can accommodate both large, global shocks as well as more localized, spatial effects (e.g. in the form of spillovers or effects stemming from geographical proximity etc.). It can also account for the issue of (the various forms of) endogeneity – a focal point in the relevant empirical literature.

Using a novel dataset of EU funds payments covering a period of more than 30 years and 242 EU NUTS2 regions, available in the Cohesion portal, we empirically assess the impact of Cohesion policy on regional economic development.
Our results indicate that, for the panel as a whole, ESIF instruments have a positive and statistically significant impact on the economic performance of EU regions. As regards the region-specific effects, the vast majority of the regions exhibit a positive and statistically significant impact. Moreover, our results show that location matters for the effectiveness of Cohesion policy. Lastly, we provide some preliminary evidence pointing to a non-linear relationship between the level of funding and its impact of economic performance

Jesús Peiró-palomino (p), Lisa Gianmoena, Andrés J. Picazo-Tadeo, Vicente Rios

Ilias Kostarakos

Social trust is a heavily rooted element whose positive impact on economic performance
has been widely corroborated for many contexts. However, the understanding
of social progress disparities in aspects other than income is attracting increasing attention
and is a key goal for the European Commission. European regions present notable
disparities in many non-economic aspects that characterize advanced societies such as
personal rights, freedom, tolerance and inclusion and access to advanced education.
This paper provides fresh evidence on the impact of social trust on a wide array of
aspects categorized as advanced features of social progress in the framework of the
European Social Progress Index 2020 (EU-SPI). The results show a positive impact of
social trust on most of the indicators, which is robust to endogeneity issues. These
insights help to understand the enormous differences in terms of social progress across
European regions and provide useful information for the design of future policies that
pursue a more equal Europe.

Balazs Gyorgy Forman (p)

Jesús Peiró-palomino

It is clearly not possible to define territorial inequalities and suburbanizing areas on the basis of the number of commuters, the proportion of employed persons or the proportion of personal income per capita. Exact data on commuting are only measured in the 10-year censuses. The latest accurate data are from 2011. It may take years for the 2022 census data to be made public. Employment indicators are improved by public employment data. But neither the wages nor the working hours of those employed in public employment correspond to full-time employment. In Hungary, there are many occupational groups whose incomes are below the national average.
The ratio of high-income earners to low-income earners, on the other hand, is an indicator available for all settlements and in a 10-year time series. In addition to the elimination of inflationary effects and the analysis of other macroeconomic effects, the data are excellent for new regional analyses. Based on the data, only a much narrower range of suburbanized regions can be seen. The analysis of income differences shows large cities falling apart and a Budapest that has stalled in its development.

Susana Suárez (p), Verónica del Rocío Zúñiga

Balazs Gyorgy Forman

Currently, cities around the world continue to grow rapidly and are centers of economic and social dynamism, but although it has been proven that there is a positive link between urban areas and economic development, as established by the United Nations in World Cities Report 2022, it is also true that they increasingly concentrate a large number of populations that are being excluded from the benefits generated by global economic dynamics. Of course, economic and social inequality is not only exhibited within cities, but also a disparity between urban spaces.

In Mexico, this reality is evident, as Sánchez Almanza (2016) points out, urban development has been a historical process marked by inequality, since, according to the economic models applied, cities and their development have been configured. Thus, according to the economic model adopted in our country, the patterns of spatial distribution of economic activities and the population have been transforming, but these transformations have not meant the disappearance of economic and territorial disparities between cities in Mexico, rather these imbalances persist.

Derived from the above, this paper aims to examine the economic and territorial disparities of the main urban agglomerations in the central region of the state of Guanajuato, a result of the trade liberalization model, in which the urban agglomerations most integrated into global circuits capital cities have been the ones with the greatest economic dynamism, while the less integrated cities have lower economic growth and the lowest level of general living conditions. Likewise, the work intends to recognize and value the guidelines of the territorial approach to development to be considered and generate a new urban management that promotes a decrease in economic and spatial inequity.

For the analysis of the economic and territorial disparities of the main urban agglomerations of the region and their relationship with the trade liberalization model, we apply the methodology proposed by OECD (2005) with which the trade openness index of a territory is obtained, based on the volume of exports and imports and their relation to GDP. In addition, we adopt the methodology used by ECLAC (2022), according to the EUROSTAT (2011) approach, which allows analyzing territorial disparities based on GDP per capita. In the same way, we calculated the territorial index of general living conditions, to examine social inequalities through the variables: life expectancy at birth, infant mortality rate, average years of study, and population in a condition of monetary poverty.