Keywords
European funds
economic convergence
spatial regression
spatial weights matrix
How to Cite
Abstract
The aim of the article is to assess the effectiveness of Cohesion Policy implementation in the regions of European Union countries, taking into account different types of interregional relations. Given the ambiguity of research findings regarding the impact of European fund expenditures on economic growth, an attempt was made to develop spatial econometric models that define spatial interactions between regions in various ways. These interactions were incorporated into the modelling process by using of six different types of spatial weight matrices: distance, contiguity, block weights, mixed, freight flows, and migration flows. The study covers 262 regions from 28 European Union countries (including the United Kingdom and Croatia) over the period 2007–2022. The results obtained align with studies indicating the conditional effectiveness of Cohesion Policy implementation. However, in contrast to previous research, our analysis suggests that the identification of the positive impact of European funds on economic growth may depend on the approach used in econometric modelling. While classical ordinary least squares (OLS) models did not confirm the impact of EU funds, the spatial approach enabled positive verification of the analysed relationship. Furthermore, the results obtained demonstrate that the method of quantifying the relations between regions (resulting from the applied spatial weights matrix) is significant in this context.
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