Researchers often estimate average treatment effects of programs
without investigating heterogeneity across units. Yet, individuals,
firms, regions, or countries vary in their ability to utilize transfers.
We analyze Objective 1 transfers of the EU to regions below a
certain income level by way of a regression discontinuity design with
systematically varying heterogeneous treatment effects. Only about
30 percent and 21 percent of the regions—those with sufficient human
capital and good-enough institutions—are able to turn transfers
into faster per capita income growth and per capita investment,
respectively. In general, the variance of the treatment effect is much
bigger than its mean.
"Absorptive Capacity and the Growth and Investment Effects of Regional Transfers: A Regression Discontinuity Design with Heterogeneous Treatment Effects." American Economic Journal: Economic Policy,
Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Intergovernmental Relations; Federalism; Secession
Regional Economic Activity: Growth, Development, Environmental Issues, and Changes