2024/01/18 by Bachtrögler-Unger, Julia
paper · doi:10.57938/47785c97-4f58-4bbd-a4ec-a7fad274547b
This study investigates the heterogeneity of European NUTS-2 regions with regard to their ability to take advantage of European Union (EU) structural funds aimed at convergence. It considers a concept of absorptive capacity based on regional policy design, and additionally accounts for the programming period 2007-2013 in the empirical analysis. A fuzzy regression discontinuity design allowing for heterogeneous treatment effects is applied to evaluate convergence funds in 250 NUTS-2 regions from 2000 (and 1989) to 2013. The main results suggest a positive conditional impact of funds payments on regional GDP per capita growth. However, based on a time-varying treatment effects model, we are able to identify a deterioration in the effectiveness of convergence funds during the programming period 2007-2013. Furthermore, the Analysis reveals an inverted U-shaped relationship between the share of committed funds paid out and GDP per capita growth. The latter finding indicates that the marginal benefits from EU convergence funds might be decreasing.