The Impact of Structural Funds Policy on European Regions Growth. A Theoretical and Empirical Approach

In this paper we try to estimate the impact of Structural Funds on the growth rates of Objective 1 European regions during the two first Programming periods (1989-2000). For that purpose, we develop a ''hybrid'' model of economic growth that partially endogenizes the rate of technical progress and we test its main implications following a panel data approach. Our results suggest that Structural Funds have positively influenced the growth process of Objective 1 regions although their impact has been much stronger during the first Programming period than during the second. The same quantitative difference between the two Programming periods appears on the estimated rates of beta -convergence and the catching-effect