Impact of investment incentives and European funds on regional development

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JEL classification

• General Economics: General
• State and Local Taxation, Subsidies, and Revenue
• Regional Development Planning and Policy

Keywords

European Funds, Investment Incentives, regional development, subsidies

Abstract

This paper analyses the situation of investment incentives and European funds from the regional economics point of view. These two public forms of support are examined with some selected statistical variables that might be considered as indicators of regional development. In particular, the paper offers an evaluation of the amount of investment incentives assigned and the amount of resources drawn from the Regional Operation Programme NUTS 2 with the following explanatory variables: the regional added value, the migration of the population within the region, the wage level in the region and the amount assigned to research and development in the companies of the region. The aim of this paper is to test and verify the influence of investment incentives and subsidies from EU funds on regional development. The research focuses only on regional development in the NUTS 2 Northeast region in the Czech Republic within the previous 2007–2013 framework. The methodology is based on a literature review of this topic, descriptive methods and statistical testing with the assistance of Spearman’s coefficient of correlation and the Pearson correlation coefficient. In particular, it confirms the results from previous research on this topic indicating that European funds are able to affect some regional indicators more than investment incentives.