Roberta Capello, Simona Ciappei (p), Camilla Lenzi

Alina Sorgner

Despite the numerous contributions assessing the efficiency and effectiveness of Cohesion Policies, their role in stimulating growth in different macroeconomic settings and in different business cycle periods, as well as their real capacity to act on interregional disparities, remain poorly understood. The aim of the paper is to shed some light on these gaps. By employing a beta-convergence framework covering all EU27 + UK NUTS2 regions in the period 2008-2019, we investigate the link between Cohesion Policy, economic growth and interregional inequalities and unpack its variation over periods of crisis and recovery, by investment axes considered and across regions with different degrees of vulnerability to the crisis. The results confirm the multifaceted nexus between Cohesion Policy and interregional inequalities and raise warnings about the potential conflicts between its overarching goals and its multiple and expanding strategic objectives.

Federico Aresu (p), Raffaele Paci (p), Emanuela Marrocu

Simona Ciappei

The EU Cohesion Policy (CP) is a key initiative of the Union's strategy to promote harmonious development across its member states.
Scholars have widely analyzed the cohesion policy and its impact on regional economic performance, employing various methodological frameworks. However, most recently, economic literature has focused on properly assessing the causal impact of funds allocated through CP on regional development, mainly employing the Regression Discontinuity Design (RDD). RDD is particularly suitable for evaluating the policy since its structure allows for a quasi-experimental design approach. Most funds are allocated to less developed regions, defined as “Objective 1” regions, with per capita GDP below 75% of the EU average.
Some recent contributions, including the analyses by Percocco (2017) and Bachtrögler et al. (2020), have highlighted the important role of regional contextual factors in the efficacy of the policy. Despite these important findings, there remains a gap in the literature: previous analyses on the topic have largely neglected the role of other sources of regional capital accumulation. This oversight is particularly noteworthy considering that the total CP funds account for a minimal part of total regional investments.
Across more recent contributions, Cerqua and Pellegrini (2018) have analyzed policy’s impacts for the period 1994-2006, extending the RDD methodology to properly take into account the intensity of the treatment, which in this context refers to the amount of financing received. This methodological extension is particularly useful for the evaluation of the policy since the allocation of financing is highly heterogeneous even among Objective 1 regions.
In our research, we aim to assess the CP’s economic impact using the innovative methodological framework developed by Cerqua and Pellegrini (2018) while accounting for other sources of regional investment. Employing data provided by DG Regional and Urban Policy of the European Commission (EC 2017), in which CP’s payments are annualized and regionalized, we conduct a comprehensive analysis that includes the programming periods 2007-2013 and 2014-2020. Moreover, the dataset distinguishes payments for each fund within the policy, enabling us to delve deeper into CP implementation nuances. By exploring these varied effects, our study seeks to understand how each fund's diverse aims contribute to the Cohesion Policy's overall effectiveness.

Maciej Smętkowski (p)

Federico Aresu

There is a very broad spectrum of research on various aspects of the impact of Cohesion Policy on socio-spatial disparities in the European Union. Similarly, many studies address the impact of the Common Agricultural Policy on rural development. In contrast, there are relatively fewer attempts to show the interaction of these policies on regional development. Against this background, the new EU Member States represent an interesting field of research, as with few exceptions their entire territories are covered by the convergence objective of the Cohesion Policy, and in some of them the low level of urbanisation combined with high agricultural employment make them important beneficiaries of the Common Agricultural Policy. Poland may be a particularly interesting case, where the volume of outlays of both these policies is among the highest in the EU, and their significance is particularly evident in the relatively modest resources allocated to other national policies. The study was focused on the contribution of European Funds to regional development and reducing socio-economic disparities at the level of sub-regions in Poland. The study did not confirm the opposing effects of the two main European Union policies on the socio-economic development of sub-regions in Poland, but neither did it confirm their complementarity. At the same time, the pro-development character of the Cohesion Policy turned out to be more pronounced, which was particularly evident in relation to the increase in the number of employed and the development of entrepreneurship, with a side effect, however, of a slight increase in disparities between subregions in this respect. Expenditures considered to be pro-development, related to support for enterprises, the development of human capital resources, as well as the development of the information society and support for research and development, were of particular importance for the dynamics of regional development processes. It turned out that investments aimed at improving the quality of life, as well as the common agricultural policy, had no impact on the dynamics of reducing relative and absolute poverty. The pro-modernisation nature of the latter policy may have had an impact on the increase in disparities in terms of the registered unemployment rate, but determining the mechanisms of this relationship requires further research, including qualitative research.

Eckhardt Bode, Alina Sorgner (p)

Maciej Smętkowski

This paper investigates the interdependency of countries’ global trade integration with their institutional settings and cultural values in affecting entrepreneurship. While most studies suggest that entrepreneurship-friendly institutional reforms or cultural changes foster entrepreneurship largely irrespective of the state of trade integration, this paper shows that the joint effects of trade integration and institutional or cultural changes on entrepreneurship are more complex. Panel fixed effects estimations for OECD countries during the period since the early 2000s show that while trade globalization has little direct effects on entrepreneurship rates, it affects them indirectly. Institutional reforms or cultural changes towards more entrepreneurship-friendly societal values become less effective in fostering entrepreneurship at higher levels of trade integration. Among others, deregulation of worker dismissals is estimated to significantly foster entrepreneurship at low degrees of trade integration but to lose part of its effectiveness as trade integration increases. This estimated loss of effectiveness is stronger for opportunity than for necessity entrepreneurship. Likewise, cultural chances towards greater individualism (vs. collectivism) are estimated to significantly foster opportunity and necessity entrepreneurship at low levels of trade integration but not at higher levels. From a policy perspective, this implies that institutional or cultural differences matter less in highly integrated economies, and governments may have to develop alternative tools to foster productivity and income growth. The paper regresses different indicators of entrepreneurship rates, including those for opportunity and necessity entrepreneurship, on trade integration, a variety of alternative indicators of national institutions and cultural values, and the interaction terms of the two, using data from the Global Entrepreneurship Monitor, the World Bank’s Doing Business and Worldwide Governance Indicators Databases, the World Value Survey and Hofstede's Cultural Dimensions.