The Effectiveness Of Objective 1 Structural Funds In The EU 15: New Empirical Evidence From NUTS 3 Regions

Based on a sample of 1,084 European regions (EU15) over the period 1995-2004, the authors estimate the determinants of regional growth of GDP per capita, allowing for both spatial lag and spatial error dependence. They find that robust LM tests can not reject the null hypothesis of no spatial dependence when country dummy variables are included in the growth equation. OLS and robust regression methods show that population density and industry share are significantly and positively related to economic growth. Regions that received EU structural funds have a significantly higher growth of GDP per capita, but the effect is only marginally significant.