The impact of EU structural funds related to innovation in socio-economic development at a local level

Abstract

Purpose: The aim of the paper is to verify the process of β-convergence at a local level in Poland within 2007-2016, taking the impact of spatial effects and obtained EU funds related to innovation on economic growth into account. Design/methodology/approach: Spatial econometric methods were used in the research procedure. The modelling uses the economic aggregate, which is an alternative to the GDP measure of development. In addition, the traditional convergence equations were modified by adding variables defining spatial interactions to the specifications of the estimated models that may affect the rate of economic growth. The study covers data from all counties (NTS4) in 2oland. Findings: The estimated econometric models showed that between 2007-2016, there was a slow process of reducing economic inequalities between counties in Poland. The convergence process was conditioned by the amount of European funds obtained for innovation. The funds acquired in a given county stimulated the economic growth of this unit while, at the same time, having negative impact on the development dynamics of neighbouring units. Originality/value: The added value of this elaboration is the inclusion of spatial effects affecting economic growth in the conducted analyses of conditional convergence. The presented study is one of a few in which the spatial impact was verified by including weights in the modelling of the matrix based on proximity, distance, flows and affiliation, carried out using data relating to all NTS4 units of a given European Union country. Keywords: β-convergence, European funds, innovation, spatial effects, spatial regression models. Category of the paper: research paper.