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Absorptive capacity and the growth effects of regional transfers : a regression discontinuity design with heterogeneous treatment effects

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Becker, Sascha O., Egger, Peter and Ehrlich, Maximilian von (2011) Absorptive capacity and the growth effects of regional transfers : a regression discontinuity design with heterogeneous treatment effects. Discussion Paper. Coventry: Centre for Economic Policy Research. CEPR Discussion Paper (No.8474). (Unpublished)

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Official URL: http://www.cepr.org/pubs/dps/DP8474.asp

Abstract

Transfers to individuals, firms, and regions are often regulated by threshold rules, giving rise to a regression discontinuity design. An example are transfers provided by the European Commission to regions of EU member states below a certain income level. Researchers have focused on estimation of the average treatment effect of this program, assuming that it does not vary in a systematic way across units. We suggest a regression discontinuity design which allows for parametric or nonparametric identification of heterogeneous average treatment effects that systematically vary with observable characteristics in order to shed light on the role of absorptive capacity in determining the impact of regional transfers on economic growth across regions in the European Union. The results suggest that only about 47% of the regions, namely those with a sufficiently high endowment with human capital and a high quality of government, are able to turn transfers under the Union's Objective 1 Structural Funds programme into faster growth. Those regions are the ones which are responsible for a positive average effect of the programme.

Item Type:

Working or Discussion Paper (Discussion Paper)

Subjects:

H Social Sciences > HB Economic Theory

Divisions:

Faculty of Social Sciences > Economics

Series Name:

CEPR Discussion Paper

Publisher:

Centre for Economic Policy Research

Place of Publication:

Coventry

Official Date:

July 2011

Dates:

Date	Event
July 2011	["eprint_fieldopt_dates_date_type_available" not defined]

Number:

No.8474

Status:

Not Peer Reviewed

Publication Status:

Unpublished

Access rights to Published version:

Restricted or Subscription Access

Version or Related Resource:

Becker, Sascha O., Egger, Peter, and Ehrlich, Maximilian von. (2012) Absorptive capacity and the growth and investment effects of regional transfers : a regression discontinuity design with heterogeneous treatment effects. Working Paper. Coventry, UK: Department of Economics, University of Warwick. (CAGE Online Working Paper Series, No.89/2012). http://wrap.warwick.ac.uk/id/eprint/57855

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