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Do Cohesion Funds foster regional trade integration? A structural gravity analysis for the EU regions

This Technical Report uses a structural gravity model to explore the regional trade and welfare impact of the EU Cohesion Policy Transport Infrastructure Investment programme estimated using a novel data-set of the Generalised Transport Costs for the EU regions at the NUTS2 level.

date:  14/10/2021

author:  Yevgeniya Shevtsova, Jorge Díaz-Lanchas, Damiaan Persyn, and Giovanni Mandras

See also:  The Technical Report

The results indicate that on average additional investment in transport infrastructure can increase NUTS2 total regional exports by 0.40% regional real GDP 1.13%. Central and Eastern European Regions enjoy the highest exports and GDP gains, while few Western European regions experience a negligible decrease in wages, which may occur as a result of factor price convergence.