European Structural and Investment Funds and Regional Convergence: The Impact of Public Deficit in Beta-Convergence

Using realized investment data, this working paper from Carlos San Juan Mesonada and Carlos Sunyer Manteiga (EconPol Europe, Universidad Carlos III de Madrid) empirically assesses the effects of the European Structural and Investment Funds on the regional convergence of income in Spanish regions, comparing the results in terms of real regional convergence. The level of indebtedness in the region has a definite adverse effect on the effectiveness of European projects, and the authors also identify an apparent spillover effect from the funds towards other border regions.