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Does EU regional policy promote local TFP growth? Evidence from the Italian Mezzogiorno
Author(s) -
Albanese Giuseppe,
Blasio Guido,
Locatelli Andrea
Publication year - 2021
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/pirs.12574
Subject(s) - total factor productivity , regression discontinuity design , economics , regional policy , economic geography , empirical evidence , panel data , productivity , regional development , population , demographic economics , econometrics , geography , economic growth , regional science , political science , demography , law , medicine , philosophy , epistemology , pathology , sociology
Total factor productivity (TFP) explains the bulk of the differences in income level across territories. A major policy issue refers to the ability of place‐based policy to promote TFP growth in backward areas. We investigate the effect of the European Regional Development Fund (ERDF) on local TFP growth in Southern Italy between 2007 and 2015. By using different empirical models (least absolute shrinkage and selection operator (LASSO) cross‐section, panel fixed‐effect regressions and a spatial regression discontinuity design), we show that, on average, local TFP seems to be rather unresponsive to EU programmes. Some suggestive evidence of a positive effect is found for ERDF infrastructure investments and for the areas characterized by higher institutional quality and population density.