An Impact Analysis of the European Structural Funds on the Variation of the Rate of Employment and Productivity in Objective 1 Regions

Regional policies seek to enable regions to increase their competitiveness and development, and as such one priority Objective of activities financed by Structural Funds is higher employment, higher productivity and economic activity. How efficiently the regions apply the funds is a fundamental issue for the development and continuity of regional policies. We therefore consider that determining the efficiency of European regional policies is an issue of high importance, and this is the main aim of this study. We have considered it appropriate to use the available information to apply a mathematical technique known as Data Envelopment Analysis (DEA), which allows us to calculate the technical efficiency and inefficiency of the Structural Funds applied in the Objective 1 regions for the period 2000–2006. Furthermore, we wish to determine if the regions have been more efficient in creasing their levels of employment or in increasing productivity. Our study applies this methodology along with other methods like regression analysis, profit analysis and factorial analysis to determine the variation in the rate of unemployment and productivity in these European Regions. The study reveals that only eight regions are efficient, although none of them is run in all the models.     

The Effect of Business Support on Employment in Manufacturing: Evidence from the European Union Structural Funds in Germany,Italy and Spain

This study investigates employment growth in the business activities supported by the European Cohesion Policy. We examine cross-industry, cross-regional variations in a sample of fourteen manufacturing industries and seventy European regions (in Germany, Italy and Spain) and take advantage of detailed European Union Structural Funds data at the regional level for the period 2000–2006. We show that business support is positively associated with higher employment growth in industries that are initially smaller and in those with higher growth opportunities. The results suggest that direct support to businesses by the European Cohesion Policy contributes to the growth process of employment in different industries. Because previous estimated effects at the aggregate level may in fact conceal large differences across industries, we conclude that our empirical analysis contributes to the understanding of how Structural Funds can affect industrial and regional development as well as adjustment paths.     

The dynamics of the community support framework for Greece and its contribution to regional convergence

The objective of this paper is to shed light on the dynamic aspects of the Community Support Framework for Greece and to further explore its contributions to regional convergence. Given that, the majority of the Greek regions have been classified among the poorest regions of the European Union (EU) with a major inter and intra regional divergence gap, the issue of catching up the convergence factors acquires paramount importance in view of the new trends of European Community (EC) Regional Policies. Unquestionably, the convergence of the Greek regions requires a series of macroeconomic management devices and the encouragement of a series of soft and hard infrastructure projects which will restructure, upgrade and adjust their regional economy. The analysis of this paper will focus on the assistance stemming from the Regional and Structural Funds of the EU, plus the Cohesion Fund with the aim to uncover the factors which determine the extension and intensity of the convergence and divergence procedure. Using the data from the Community Support Framework (CSF I) (1989–1993), which has already been completed, attention will be paid to some of the basic problems which decisively impedes the real convergence of the Greek regions. The author will also examine in depth the criteria used by the competent authorities in allocating the funds to the regional bodies in relation with the existing regional imbalances and then he will propose a new synthetic method considering more factors which influence the final allocation approach. The conclusions of the paper might systematically unravel a series of problems facing the regions both socio‐economic and administrative which if they are not effectively confronted may possibly enlarge the existing divergence gap of the Greek regions.     

EU Regional Policy After 2006: Will Scotland Notice the Difference?

In order to accommodate the recent enlargements of the European Union (EU) there has been considerable changes to the operation of EU regional policy which means that Scotland along with other regions in the EU-15 will receive considerably less money from the Structural Funds in the future. This article discusses the extent to which the reduction in EU funding for economic development will impact on the Scottish economy. The issue is explored by considering the contribution, which Structural Funds have made in the past to economic development in Western Scotland, which has received the lion's share of the money allocated to Scotland. It is suggested that whilst the amount of economic development in Scotland will not be significantly reduced as a result of the decline in EU funds the types of projects and organizations receiving funding will alter because of changes made to the way in which the funds are administered in Scotland.     

Evaluating the governance of structural funds programmes: The case of community economic development in South Yorkshire

Methods for evaluating regional and urban policies have become increasingly sophisticated in recent years. However, this paper argues that the evaluation of Structural Funds programmes has systematically underplayed the effect of governance on both programme design and implementation. This paper uses the role of voluntary and community sector organizations in promoting community economic development initiatives within the European Union's Structural Funds programmes in South Yorkshire as a case study. An argument is made for extending evaluation methods, especially theory-based evaluation, through using multi-level governance as a “theory of change”. A key finding is that to explain how programmes work, evaluators need to consider formal partnership and management arrangements, their traditional focus, but also wider governance structures and the importance of informal policy networks. Such a focus allows for a consideration of issues such as resource mobilization and power.     

The Impact of European Structural Funds in the South of Spain

Over the last decades, the European Union has contributed to the development of poor regions of the Associate Members. This is the case of Andalusia, an Objective 1 region for the European regional policy in the south of Spain. In this paper we carry out an impact analysis of the European Regional Development Fund (ERDF), one of the most important Structural Funds, to the object of assessing its effect on aggregate and sectoral production, price indexes and consumers’ welfare. To this extend we compute an Applied General Equilibrium Model (AGEM) and we present a counterfactual analysis with simulations for three representative years: 1990, 1995 and 1999. We conclude that regional funding has deeply contributed to Andalusian regional development and the effectiveness of the funds seems to be larger for the last years of the study.     

Analysing How Environmental Concerns are Integrated in the Design of the EU Structural Funds Programmes

This paper analyses the environmental measures co-financed by the European Union (EU) Structural Funds in the less-developed regions. Specifically, it studies if these environmental measures are tailored to the specific needs of the different regions and whether they are driven by an ecological modernization approach. The inclusion of environmental goals into the regional policy is also tested by analysing its connection with the main European environmental directives. We find a suitability of the regional programmes to the regional specific environmental factors, a scarce presence of the ecological modernization paradigm behind the programmes implementation and a clear orientation of the regional programmes to meet the EU legislation.     

European Corridors as Carriers of Dynamic Agglomeration Externalities?

Transport corridors are viewed as a promising way forward in European Union (EU) transport policy, assumed to contribute positively to regional economic development. However, the validity of this assumption is not evident. The aim of this paper is to empirically test whether agglomeration economies in European transport corridor regions are positively related to indicators of regional economic development compared to regions outside the scope of corridors. The results build on the notion that the type of agglomeration economy in combination with the structure of the economy matters for prospects of structural economic growth in different regions. In this way, the analysis not only contributes to enhancing the empirical scrutiny of the corridor concept in EU transport policy, but also provides new insights into how corridors contribute to regional economic growth. We find only limited evidence for a corridor effect across European regions on productivity and employment growth externalities. Instead, we find a large degree of spatial heterogeneity interacting with corridors—a heterogeneity that has been little recognized in EU policies. We suggest that recent attention to place-based development strategies may accord well with the kinds of agglomeration effects related to corridor development observed in this study.     

Determinants of the Uneven Regional Participation of Firms in European Technology Programmes. The 'Low R&D Trap'

Technology is of key importance to the growth of regional firms and economies. Research has shown the association between low technology development or take-up and regional disparities. Hence technology policy is moving closer to the heart of regional policies. European innovation programmes are intended to involve firms, large and small, in international technology research and development networks. The paper focuses on the involvement of Spanish firms in such programmes. Participation tends to be low if business R&D, presence of large firms, and the development of regional innovation systems are also low. Creation of R&D infrastructure through the Structural Funds has now to be prioritized at EU level and also define a new scheme of sectoral priorities in order to support R&D innovation activities in fields diverse from high-tech, if regions are to escape the 'low R&D trap'.     

Structural Funds and European Regional Growth: Comparison of Effects among Different Programming Periods

Strengthening social, economic and territorial cohesion is a central objective of the European Union (EU) and the Structural Funds reflect the main financial effort of the EU to pursue this goal. So far we have gone through four programming periods; to what extent the EU Funds have become more effective in promoting growth and reducing the disparities between EU Member countries is a matter of concern. We investigate the existence (or not) of learning effects and efficiency improvements following the reforms of Regional Policy. The study is applied to data from EU regions (EU12) in the most recent programming periods where data are available. The results suggest an improvement of the Funds efficiency in growth in 2000–2006 when compared to the previous programming period. Moreover, the returns from investments of Funds tend to be higher in richer, higher-educated and more innovative regions. Finally, the Cohesion group has not been able to transform the large transfers received into additional growth.     

The Regional Allocation of Public Investment: Efficiency or Equity?

In this paper we examine the effect of public investment on the regional economies of Japan. The efficient policy for regional allocation of public capital is to invest in highly productive regions, whereas the actual policy pursues equity goals by allocating more public investment to depressed regions. We determine the effects of this equity- oriented allocation by estimating the aggregate regional production function and calculating the productivity of public capital stock for each region, using a cross-sectional time-series data set. Our results show that the marginal productivity of public capital has recently declined in most depressed regions, whereas the productivity in developed regions (e.g., Tokyo, Osaka) has increased slightly. We compare alternative policies of allocating public investment and their effects on the regional and national economies using numerical simulations. We then quantitatively describe the trade-off between the efficient and the equitable allocation of public investment.     

Structural Funds of the European Union in Poland—Experience of the First Period of Membership

The aim of this article is to present the results of the first period of taking advantage of Structural Funds in Poland. The analysis refers to realisation of the planned activities in the strategic document which is the National Development Plan 2004–2006, being a base of the new model of the Polish regional policy. The obtained results show the level of success of Structural Funds including the structure being a result of Operational Programmes which are a part of the National Development Plan, and the structure of beneficiaries, among which the listed ones are: units of local governments, businessmen, non-governmental organizations and educational institutions. In each case the analysis includes regional differences of the absorption process which allows us to define the influence of Structural Funds on changes of regional economic development in Poland.     

Determinants of regional resilience to economic crisis: a European perspective

The impact of the economic crisis has been highly asymmetric across the European regions. The objective of this paper is to investigate the determinants of resilience to economic crisis across European regions. Regional economic resilience was assessed based on employment changes during 2008–2013, while socioeconomic determinants were analysed pre-crisis (2002–2007). A highly heterogeneous pattern of resilience was observed within countries, while significant differences were also revealed between the continental northern-central regions and the southern periphery. A multilevel logistic regression model indicated the magnitude of country-effects on the performance of regional employment during crisis periods. Both EU-referenced and country-referenced regional resilience identified the positive effect of accessibility and the negative effect of a large manufacturing sector in the ability of regions to withstand recessionary shocks. Education and economic development level positively affected the resilience of both large and small regional European economies. Investing in education enhances the spatial homogeneity across Europe in terms of its ability to react to economic shocks. The results reveal the importance of narrowing disparities among regions and formulating targeted and differentiated regional development policies at country level, taking into consideration the size of the economy of the regions.     

EMU versus the regions? Regional convergence and divergence in Euroland

There is currently considerable interest in and debate overthe impact of increasing European economic and monetary integration(EMU) on the regions of the EU. Opinion is sharply divided overwhether EMU is leading to regional economic convergence or regionaleconomic divergence. This paper examines the theoretical argumentsand empirical evidence for these opposing views, and presentssome additional analysis of patterns of regional productivitytrends and employment growth over the period 1975–98.The picture that emerges is a complex one: whilst worker productivityshows only very weak convergence across the EU regions (a processwhich halted altogether after the mid-1980s), regional employmentgrowth has been sharply divergent. Although there is littlesupport for the claim that EMU will lead to regional convergence,these findings suggest that until much more detailed investigationof the specific impacts on particular types of region is undertaken,the regional implications of EMU will remain a contentious issue.     

The Structural Funds in Andalusia for the Programming Period 2014–2020: Time for Tightening Belts

During the period 2014–2020 it will be the first time since Spain joined the European Economic Community that the Southern region of Andalusia will not be considered as one of the Objective 1 priority areas for the European Regional Policy. This paper analyses the economic impact of the foreseeable withdrawal of an important amount of European Structural Funds in the region. Our point is to develop a dynamic general equilibrium model to assess, under different simulation scenarios, the effects of the removal of this funding on the main regional economic indicators, specially focusing on GDP growth, a key variable for the future of the region.     

What Kind of Entrepreneurship Drives Regional Development in European Non-core Regions? A Literature Review on Empirical Entrepreneurship Research

Regional policies across Europe aim at stimulating regional development in non-core regions through fostering entrepreneurship. However, the policies applied in non-core regions and the concepts of entrepreneurship these policies are based on differ. Therefore, the goal of this review is to identify different understandings of entrepreneurship and their role for regional development processes in European non-core regions. To this end, empirical studies investigating entrepreneurship in European non-core regions from 1999 to 2011 were analysed. The results of the analysis are presented along three drivers and outcomes of entrepreneurship identified inductively from the literature: innovation, social capital and institutional change. We made out seven different types of entrepreneurship in European non-core regions. These seven types of entrepreneurship comprise particular mechanisms through which they stimulate regional development. Further research should study the interplay between these different mechanisms of regional development in non-core regions which may induce a more territorial approach to understand entrepreneurship in non-core regions across Europe.     

Planning strategies and practices in non-core regions: a critical response

ABSTRACT

The development of non-core regions has attracted growing interest within the current debates of economic geography, regional studies and spatial planning. The divergence between economically successful core regions and less privileged non-core regions continues despite policy interventions aimed at tackling spatial disparities and income inequalities. While traditional growth-oriented policies raise concerns over their effectiveness and relevance beyond large cities and metropolitan regions, there is growing interest in exploring new research paths and policy options that are better able to address development challenges in non-core regions. Contributors to this special issue engage with these debates by reflecting on planning policies and practices in five European countries, paying special attention to identifying planning strategies for non-core regions. This paper argues that alternatives to growth-oriented models require additional conceptualization and analysis to translate values into policies and institutions.     

COMPARATIVE REGIONAL POLICY IMPACT ANALYSIS: EX POST EVALUATION OF THE PERFORMANCE OF THE EUROPEAN REGIONAL DEVELOPMENT FUND*

ABSTRACT. This paper addresses the issue of ex post impact analysis of regional policies in the European Community. The analysis is both methodological and applied in nature. After a concise overview of existing impact assessment methods, a two-step approach by means of an exploratory frequency method and an explanatory rational expectations-based model is proposed in order to provide an empirical framework for cross-regional comparative evaluation of the performance of the European Regional Development Fund (ERDF). The seope and applicability of the method is illustrated by means of a case study for Dutch regions.     

Do EU Regional Policies Favour Regional Entrepreneurship? Empirical Evidence from Spain and Germany

The European Commission in the scope of its cohesion policy tries to increase competitiveness of the European Union (EU) regions by supporting, beside many other instruments, entrepreneurial activities in the EU sub-national regions. This paper sheds an empirical light on the relationship between entrepreneurial activities and entrepreneurial perceptions on the one hand and the economic performance of regions eligible for EU regional policies in Spain and Germany on the other. Based on empirical data on the NUTS2 level, there will be analysis of whether previous EU support has later had an impact on entrepreneurial activities and/or entrepreneurial perception in the regions. The results show empirical evidence for a relationship between entrepreneurial activities and EU regional policies. However, other determinants such as gender and the role model function have an even stronger impact. Some of the results may help to increase the effectiveness of EC regional policies and of regional policies of the national governments, especially if the interdependence of entrepreneurship support policies and proper regional policies is considered.     

European Cohesion Policy impact on development and convergence: a local empirical analysis in Portugal between 2000 and 2014

Substantial European Structural and Investment Funds (ESIF) monies have been directed at regional economic and social development in Portugal in which Portuguese local government plays a vital role. Given the magnitude of funding, an important question turns on the effect of the ESIF on overall local authority performance. This paper focuses on the impact of the ESIF on Portuguese municipality performance and development. In particular, it investigates whether the ESIF improved the performance of Portuguese local government and which factors best explain its effect on municipality development. The analysis considers all 308 Portuguese local authorities for the period 2000–2014. Various policy implications flowing from the empirical results of this analysis are explored.