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The Impact of Cohesion Policy on Industrial Development and Innovation: Empirical Evidence From Bulgaria
Abstract
The aim of this chapter is to examine the effects of the financial support provided by the Cohesion Fund, the European Regional Development Fund and the European Social Fund on regional industrial development and innovation in Bulgaria. The methods used are descriptive, comparative, correlation and regression analysis on panel data for all six NUTS-2 regions covering the period 2007-2023. The results show that the financial support provided by EU funds has a positive effect on regional GDP growth, regional innovation index and gross domestic expenditure on R&D, but no significant impact and improvement is observed in industrial performance indicators such as gross value added by industry, gross fixed capital formation in industry and industrial employment. In addition to the persistent pattern of industrial decline, the study highlights the uneven territorial distribution of EU funding, with a disproportionately large share being absorbed by the most developed region, thus contributing to deepening regional disparities and intensifying the core-periphery dynamic within the country.
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