Fertile soil for Structural Funds? A panel data analysis of the conditional effectiveness of European cohesion policy Author-Name: Sjef Ederveen

Structural funds are the most intensively used policy instrument by the European Union to promote economic growth in its member states and to speed up the process of convergence. This paper empirically explores the effectiveness of European Structural Funds by means of a panel data analysis for 13 countries in the European Union. We show that ? on average ? Structural Funds are ineffective. For countries with the ?right? institutions, however, Structural Funds are effective. The latter result is obtained for a wide range of conditioning variables, such as openness, institutional quality, corruption and indicators for good governance. JEL codes: F35, F36, O11, O40, O52, R58 Keywords: European Cohesion Policy, policy effectiveness, economic growth, European Union

Estimating the Skill Bias in Agglomeration Externalities and Social Returns to Education:Evidence from Dutch Matched Worker-Firm Micro-Data

This paper employs a unique set of micro-data covering almost one-third of the Dutch labor force, to estimate the heterogeneity of agglomeration externalities across education levels. This paper shows that there is substantial heterogeneity in the relationship between agglomeration and productivity of workers (proxied by their hourly wage) with different educational background. Apart from estimating the impact of the aggregate density of regional labor markets, we also estimate whether the composition of the local labor market in terms of education is related to the productivity of different types of workers. Using the presence of universities as an instrument, we estimate the effect of the supply of university graduates on wages, i.e. the social return to education. We find that agglomeration externalities are substantially higher for high- and medium skilled than for low-skilled employees. We find no positive effects from the presence of high-skilled on the productivity of low-skilled

Spatial Distribution of Economic Activities in Local Labour Market Areas: the Case of Italy

In recent years, a large number of studies investigated the spatial distribution of economic activities in Western Europe by means of various measures of geographical concentration. The fundamental problem with the indices currently used in the literature is that they do not take explicitly into account the spatial structure of the data, and as a result the same degree of concentration is compatible with very different localization schemes. In the present work we present an analysis which combines the information provided by the standard measure of concentration of Ellison and Glaeser together with the measure of spatial correlation introduced by Moran. The problem known in geography as MAUP is here addressed by considering both administrative and functional regions in the empirical analyses. Data on employment and plant size for the years 1991 and 2001 are used to identify sectoral location patterns in Italy and The Netherlands within the manufacturing and service sectors.

The Role of Knowledge Externalities in the Spatial Distribution of Economic Growth: A Spatial Econometric Analysis for US Counties, 19692003

The traditional view of cities as monocentric conglomerates of people clustered around an employment center, driving economic growth in cities that subsequently trickles down to the hinterland, is increasingly being challenged. In particular, the role of space, technological leadership, human capital, increasing returns to scale and industrial clustering as well as hierarchical organization principles have been emphasized in the more recent literature. This paper utilizes exploratory and spatial econometric data analysis techniques to investigate these issues for US counties using data from 1969 through 2003. Ultimately, contiguous and hierarchical organization and interaction patterns are captured using an endogenous growth model allowing for spatial effects, inspired by earlier work on human capital and technology gaps. We investigate a neoclassical growth model and compare it to a spatial version of an endogenous growth model allowing for "domestic" investment in human capital and catch-up to the technology leader, and find that human capital strongly contributes to growth in a neoclassical setting, but much less so in an endogenous setting. In the endogenous model the catch-up term dominates in comparison to "domestic" human capital effects.Labor and Human Capital,

Growth and Technological Leadership in US Industries: A Spatial Econometric Analysis at the State Level, 1963-1997

For several decades, cross-country analyses have dominated the literature on economic growth. Recently, these analyses have been extended to include sectoral variation as well as spatial variation across sub-national regions. This paper investigates economic growth and potential determinants of the process of catch-up to technology leaders for several economic sectors, using data for the lower 48 US states from 1963 through 1997. We analyze the potential influence of factors such as human capital, and geographical distance to the technology leader. A spatially explicit growth model in which technological progress is endogenously determined is used to model productivity growth in nine US industries, ranging from mining to government, and including a combined sector of totals. The results indicate that none of the sectors exhibits ó-convergence, but they all show strong evidence of â-convergence with a convergence club pattern that is apparent for the wholesale/retail sector. The catch-up effect to the technology leader dominates the growth process in almost all sectors, and it works through the interaction with human capital.regional economic growth, convergence, industry level, technological leadership, spatial econometrics, Industrial Organization, C21, I23, O33, R12,

Agglomeration Externalities and Localized Employment Growth

This paper addresses the question to what extent the performance of industrial sites is affected by their local economic structure and accessibility. For this aim, we test for the existence of statistically significant relationships between agglomeration externalities (specialization, diversity, and competition), accessibilty measures and the employment growth of a particular industry on a particular site. We use data on employment growth of site-industries on 68 formal industrial sites in the municipality of Amsterdam between 1998 and 2006. We show that at the site-industry level, specialization hampers growth. Furthermore, we find that industrial sites that are easily accessible from the highway grow relatively fast, as well as sites located in the Amsterdam harbour area

Fertile Soil for Structural Funds?

Structural funds are the most intensively used policy instrument by the EuropeanUnion to promote economic growth in its member states and to speed up the process ofconvergence. This paper empirically explores the effectiveness of European Structural Fundsby means of a panel data analysis for 13 countries in the European Union. We show that onaverage Structural Funds are ineffective. For countries with the right institutions,however, Structural Funds are effective. The latter result is obtained for a wide range ofconditioning variables, such as openness, institutional quality, corruption and indicatorsfor good governance

The Empirical Economic Growth Literature: Robustness, Significance and Size

The empirical economic growth literature is criticized for its lack of robustness. For different definitions of robustness, conclusions vary from ?almost every correlation is fragile? to ?a substantial number of explanatory variables are robust.? We re-analyze the empirical results of the economic growth literature for various alternative definitions of robustness using quasi-experiments. The analysis pertains to sign, size and significance of the effects, and we relax the quasi-experimental procedure by no longer applying a set of ?fixed? variables. Response surface analyses of the quasi-experiments reveal that the number of robust variables is limited, the effects crucially depend on the specification of conditioning variables, and the default specification based on the convergence/catch-up model is associated with estimated effects of conditioning variables that constitute outliers

The Spatial Distribution of Economic Activities in Italy

Existing indices measuring the spatial distribution of economic activity such as the Krugman Specialisation Index, the Hirschmann-Herfindahl index and the Ellison-Glaeser index typically do not take into account the spatial structure of the data. In this paper, we first consider traditional measures of geographical concentration, and subsequently extend the analysis to take spatial dependence into account. Using data for Italy for the years 1991 and 2001, we apply exploratory spatial data analysis to identify sectoral location patterns in both the manufacturing industry as well as in services. We find that large differences prevail in the geographical concentration of production across sectors. The results of the exploratory spatial data analysis reveal the existence of well- defined clusters of economic activities

The Impact of Monetary Policy on Economic Activity - Evidence from a Meta-Analysis

This paper presents the findings a meta-analysis identifying the causes of variation in the impact of monetary policies on economic development. The sample of observations included in our meta-analysis is drawn from primary studies that uniformly employ Vector Autoregressive (VAR) models. Our findings reveal that capital intensity, financial deepening, the inflation rate, and economic size are important in explaining the variation in outcomes across regions and over time. Differences in the type of models used in the primary studies also significantly contribute to the explanation of the variation in study outcomes