This paper evaluates the impact of EU structural funds on the GDP per capita of the European regions using an econometric model that captures the mutual causal links between the two variables. The paper also estimates the impact of structural funds spent in a given region on neighbouring regions.
The GDP of a region is estimated to increase on average by about 2.6 times the amount of the structural funds spent in that region. The effect is markedly higher in lagging regions, especially in countries supported by the Cohesion Fund. The impact on the GDP of neighbouring regions is also positive and significant, although much smaller.
