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The Effects of EU Structural Funds on Domestic Deposits and Growth: Evidence from the Greek Economy: 1986-2013

Panagiotis Liargovas, Spyridon Repousis

The purpose of this paper is to examine the impact of EU Structural Funds on domestic deposits in the case of Greece during the 1986-2013 period. Structural Funds, as a type of foreign capital inflow, are additive to domestic savings and therefore they are expected to cause an increase in domestic savings and growth. Nevertheless, the empirical results presented in this paper do not support this hypothesis. Structural Funds as other types of foreign assistance can increase consumption, distort individual incentives, and hence offset any positive effect on savings and growth, by encouraging rent-seeking as opposed to productive activities.


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