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1. The Future of EU Cohesion - Effects of the Twin Transition on Disparities across European Regions

Author:
Ambre Maucorps, Roman Römisch, Thomas Schwab, and Nina Vujanović
Publication Date:
05-2023
Content Type:
Special Report
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Closing the prosperity gap between regions has always been a key political aspiration of the European Union – and cohesion policy is the primary means to achieve that goal. Europe is currently undergoing a digital and green transition that is drastically changing the way its economy works. How well prepared are regions to capitalise on the twin transition? And what impact will it have on regional cohesion in Europe? Our study finds that greening and digitalising the economy will likely widen the gap between rich and poor regions in Europe.
Topic:
European Union, Economy, Regional Integration, Digitalization, Green Transition, and Regional Development
Political Geography:
Europe

2. A Comparative Analysis of the Social Situation Between Carbon-intensive and Noncarbon-intensive Regions

Author:
Roman Römisch
Publication Date:
11-2023
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This study focuses on the social situation in carbon-intensive regions and the role of migration in defining its quality. The analysis examines whether carbon-intensive areas, especially those with large outward migration, are more vulnerable to adverse social trends than other regions. Our findings reveal a robust association between the processes of decarbonisation and migration, which collectively exert a significant impact on the social conditions within EU regions. This influence is assessed using various indicators, such as the Social Progress Index, employment rates, availability of hospital beds, access to preschool education, and the prevalence of severe material deprivation. We demonstrate that compared to noncarbon-intensive regions, carbon-intensive regions, compelled as they are to undergo structural changes to meet environmental requirements, have a diminished capacity to offer their residents satisfactory employment opportunities and a high quality of social life. Moreover, if carbon-intensive regions experience the challenge of negative net migration, their social development is highly likely to face a notable deterioration. On the other hand, in cases where inward migration predominates, regions at risk of decarbonisation tend to exhibit minor deterioration – and even outperform the noncarbon-intensive group experiencing outward migration.
Topic:
Migration, European Union, Decarbonization, and Regional Development
Political Geography:
Europe

3. Migration Drivers in Carbon-intensive Regions in the EU

Author:
Stefan Jestl and Roman Römisch
Publication Date:
11-2023
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
The paper analyses drivers of migration in carbon-intensive and non-carbon-intensive regions in the EU. Using a mix of econometric methods, such as spatial panel and spatial cross-sectional methods, as well as geographically weighted regressions on data for EU NUTS-2 and NUTS-3 regions, the results indicate that particularly carbon-intensive regions in Central and Eastern Europe are not only challenged by a potential decline in carbon-intensive employment but also by outward migration flows that could diminish their prospects for longer-term economic prosperity. From a policy point of view, the results indicate that policies focusing on the replacement of the lost jobs in carbon-intensive industries might not be enough for the carbon-intensive regions in Central and Eastern Europe. Instead, these regions need a simultaneous package of additional policies to improve their attractiveness.
Topic:
Migration, European Union, Carbon Emissions, Green Transition, Regional Development, and Regional Migration
Political Geography:
Europe

4. On the Economic Effects of a Reallocation of EU Cohesion Policy Expenditures

Author:
Stefan Jestl and Roman Römisch
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper analyses the economic effects of a reallocation of Cohesion Policy expenditures across EU countries. We evaluate a shift from stronger (i.e. older) Member States to less-developed EU economies (i.e. CEE countries) and vice versa. On top of that, we also assess the effects of a general reduction in the Cohesion Policy budget. For evaluation, we construct a demand-driven macroeconomic model which spans country models of 21 EU economies and is calibrated based on empirical data for the period 1995-2018. Our results suggest that a shift of Cohesion Policy funds to more (less) developed countries would result in a higher (lower) overall economic performance. However, the reallocation would affect economic outcomes in EU economies unevenly. In addition to direct effects on demand and production, it is pivotal to take into account indirect effects via trade as well. As a result, Cohesion Policy seems to be confronted with a trade-off between long-run convergence and short-run economic performance.
Topic:
Economics, International Political Economy, European Union, Economic Growth, Investment, and Economic Cooperation
Political Geography:
Europe and European Union

5. Estimating Demand Spillovers of EU Cohesion Policy Using European Regional Input-Output Tables

Author:
Roman Römisch
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper develops a simple method to consistently break down world input-output tables to regional input-output tables. They are used to estimate Cohesion Policy-induced demand spillovers in the EU, covering the years 2007-2018. Results indicate that Cohesion spillovers from less developed regions to other regions exceed 40% of their initial EU support in some cases. In addition, spillovers from the more developed regions are equivalent to 24% of their initial EU support. This shows that the existing trade and investment linkages across the EU regions are strong and not only run from less developed to more developed regions but also vice versa. Our results are good news for the net paying regions in the EU. Taking into account capacity growth effects, Cohesion Policy spillovers might well be a multiple of the pure demand spillovers estimated in this paper. Thus, for net paying regions, Cohesion Policy is not only an act of European solidarity but also a rational long-run economic growth policy.
Topic:
Economics, International Political Economy, International Trade and Finance, European Union, Investment, and Economic Cooperation
Political Geography:
Europe

6. The Effects of the EU Cohesion Policy on Regional Economic Growth: Using Structural Equation Modelling for Impact Assessment

Author:
Stefan Jestl, Ambre Maucorps, and Roman Römisch
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper analyses the effects of the EU Cohesion Policy (CP) on the economic growth of 276 European NUTS-2 regions between 2008 and 2016. Using a structural equation model (SEM) consisting of both a measurement component (with two latent variables) and a structural component, we estimate the impact of CP funding on the growth of GDP per capita across EU regions. The estimation also enables us to predict changes in the growth of GDP per capita based on a scenario of CP funding reallocation between member states. Overcoming the limitations of traditional linear regression, SEM modelling proves to be a promising method for impact evaluation, also allowing for the inclusion of indirect causal paths and feedback loops to depict, for example, cross-border economic spillover effects.
Topic:
Economics, International Political Economy, European Union, Economic Growth, Investment, and Economic Cooperation
Political Geography:
Europe