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The present paper analyses the impact of the EU funds, for the European region of Azores, as they affect GDP, employment, and the wellbeing of families in different income levels, using a dynamic, multi-sector, computable general equilibrium model ( CGE) - Azor Mod. Simulating the impact of a total cut in transfers and comparing with a base business as usual scenario, it is concluded that the elimination of the EU transfers could cause a sharp permanent fall on public demand and an immediate 2 per cent fall in GDP. The fall in public demand causes a fall in consumer and investment prices which will foster a sharp increase in investment demand that gradually causes GDP to grow back to its initial levels within a ten year period. [ABSTRACT FROM AUTHOR]

The territorial capital of regions is an important determinant of growth, but also of the impact of EU Cohesion Policy. First, because it can act as a filter, enhancing the impact of regional policies. Second, the latter can help building territorial capital which, in turn, will foster regional development. This work analyses the medium and long‐run relationship between the territorial capital of EU NUTS 3 regions and Cohesion Policy using data from the programming period 2000–2006. Results point out complementarities between different territorial assets of regions and the impact of EU regional policy: Cohesion Policy effectiveness is higher when investments are focused on the assets complementary to those already abundant in the region. [ABSTRACT FROM AUTHOR]

In this study we argue that the capacity of regions to attract FDI is affected by the own-country effect, which can take two different forms: the first relates to the relative performance of the country of which the region is part (the between-country effect); the second concerns the relative performance of regions within their own countries (the within-country effect). By using spatial econometrics techniques we demonstrate that the own country effect exists. However, while the within effect is always positive, the between one may be either positive or negative. This means that successful regions in unsuccessful countries generally enjoy an extra- FDI premium, while regions in successful countries do not necessarily do so. [ABSTRACT FROM AUTHOR]

Given the increasing share of the EU budget devoted to Regional Policy, several studies have tried to identify the impact of structural funds on economic growth. However, so far no consensus has been reached. We assess Regional Policy effects through a non-experimental comparison group method, the regression discontinuity design, and a novel regional dataset for the 1994-2006 period. We exploit the allocation rule of EU transfers by comparing regions with a per capita GDP level just below the eligibility threshold (75% of EU average) with those just above. Our findings show a positive impact of EU Regional Policy on economic growth. [ABSTRACT FROM AUTHOR]