Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/204007
Authors: 
Fattorini, Loredana
Ghodsi, Mahdi
Rungi, Armando
Year of Publication: 
2018
Series/Report no.: 
wiiw Working Paper 142
Abstract: 
In this paper, we empirically test the effects of the EU's 'cohesion policy' on the performance of 273,500 European manufacturing firms after combining regional policy data at NUTS 2 level with firm-level data. In a framework of heterogeneous firms and different absorptive capacity of regions, we show that the financing of 'cohesion policy' by the European Regional Development Fund (ERDF) aimed at direct investments in R&D correlates with an improvement of firms' productivity in a region. Conversely, funding aimed at overall Business Support correlates with negative productivity growth rates. In both cases, we registered an asymmetric impact along the firms' productivity distribution, where a stronger impact can be detected in the first quartile, i.e. less efficient firms in a region. We finally argue that considering the heterogeneity of firms allows a better assessment of the impact of 'cohesion policy' measures.
Subjects: 
firm performance
total factor productivity
cross-country analysis
convergence
regional policy
JEL: 
D22
D24
E23
F15
L25
Document Type: 
Working Paper
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