Publication details
EU Cohesion Funds and Slovak Enterprises: Insights from Programming Period 2014-2020
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| Year of publication | 2025 |
| Type | Appeared in Conference without Proceedings |
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| Description | The main objective of the European Union (EU) Cohesion policy (CP) is to strengthen economic, social, and territorial cohesion by reducing regional disparities. Brexit, the new challenges facing the EU, and the socio-economic consequences of the COVID-19 pandemic created pressures, particularly on the effectiveness and efficiency of its resources. By far, most studies find a conditional impact of CP on growth and convergence, where the effectiveness of CP depends on various factors, such as quality of institutional set-up, decentralized administrative structure, other supportive policies on national and regional levels, sound macroeconomic policies, industrial structure, territorial capital and regional characteristics, human capital, and others. Newer studies in the field point out that an analysis should also be conducted at the micro level. The microeconomic analysis may be conducted from two different perspectives. On one hand, the national or supranational financing and management bodies may be interested in the effectiveness of the use of provided funds, reaching project goals, and their alignment, transmission channels, and contribution with respect to the overall CP objectives. From the individual company's perspective, a direct (beneficiary) or indirect involvement in CP projects (as a subcontractor or supplier) may present a substantial source of income and revenue that would be unavailable. As the provision of EU funding bypasses the usual market allocation mechanism that, in classical and neoclassical theories, ensures efficient use of scarce resources, it may be viewed as a source of unfair advantage and potential misallocation. To consider such effects, we evaluate the consequences of EU Cohesion policy funds in Slovakia from the perspective of corporate efficiency, performance, and financial standing of companies directly or indirectly involved in EU Cohesion policy-funded projects. In our paper, we present an analysis of the Cohesion policy and its effects during the 2014-2020 programming period in Slovakia. Our analysis is augmented by using granular microeconomic data on Slovak enterprises engaged in EU Cohesion policy-funded projects by utilizing a unique dataset on financials and ownership structures spanning all Slovak legal entities in the given period. |