Regional Convergence and Structural Funds - A Malmquist Index Approach for Italy

In this paper we put to test the impact of the European Structural Funds on the economies of the 20 Italian administrative regions for the 1989-2006 period. The main elements of novelty are that the empirical analysis is carried out by considering separately four sectors (agriculture, energy and manufacturing, construction, services), and that a non-parametric FDH-VP approach is used in order to calculate some Malmquist index numbers of productivity. This allows separating the Funds' effects on factor accumulation from those on total productivity changes. Our evidence implies that the Funds had a weak, but significant, impact on capital accumulation, total factor productivity change and employment. This impact is strongest in agriculture and services, and weakest in energy and manufacturing