Regional absorption capacity of EU funds

Ines Kersan-Škabić,Lela Tijanić

doi:10.1080/1331677x.2017.1340174

Ines Kersan-Škabić, Lela Tijanić

Open Access

https://doi.org/10.1080/1331677x.2017.1340174

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Abstract

Absorption of the financial resources allocated from the EU funds is a very important aspect of the European integration process, while there is a lack of empirical researches on the determinants of a country/region’s abilities to efficiently absorb the money. This study investigates the influence of the chosen territorial economic preconditions important for successful absorption of EU funds over the last two Cohesion Policy programming periods, on the sample of convergence and developed NUTS 2 regions of the EU. The analysis is based on 86 regions that have GDP per capita less than 75% of the EU average (convergence regions) and 186 regions that have GDP per capita above 75% of the EU average (developed regions). By using panel data analysis, it is confirmed that the absorption of EU funds is conditionally affected by regional economic characteristics. The results of the study contribute to empirical researches on the determinants of regional absorption capacity in the EU and can be important in discussions surrounding Cohesion Policy planning and programming.

Highlights

Cohesion policy is focused on creating the preconditions for the development of all European regions, but ones that are lagging behind the average of the EU GDP per capita
Regional absorption capacity in the EU depends on territorial economic preconditions for successful absorption of EU funds
The analysis has shown that the following determinants are crucial for explaining the absorption capacity: labour force characteristics, decentralisation, investments, institutional framework and infrastructure development

Summary

Introduction

Cohesion policy is focused on creating the preconditions for the development of all European regions, but ones that are lagging behind the average of the EU GDP per capita It offers them instruments (funds) aimed to finance their development goals and activities which, on the one hand, arise from the Europe 2020 strategy but at the same time, cover numerous problematic areas in the development path of these regions (lack of adequate infrastructure, entrepreneurship, unemployment, etc.). The available funds seem to be a great opportunity for new member states, but this does not necessarily mean that countries and their regions/other subjects will be able to fully exploit them. Their success depends on the ‘absorption capacity’. The final section gives the concluding remarks in line with the main goal of this article

Literature review

Findings

Concluding remarks and implications