Direct and Indirect Agricultural Fund Transfers and Economic Growth in the European Union

Abstract

It is aimed to analyze effects of direct and indirect agricultural fund transfers to the EU member countries on economic growth. Therefore, Common Agricultural Policy and Cohesion Policy funds of the EU were examined for 15 initial EU members for 1995-2009 with an extended Solow growth model and panel data analysis tools. According to the GLS estimation with robust standard errors, it was understood that both direct and indirect transfers to agriculture affect real national income growth rate positively, referring to their importance both to the economy and to the sector itself within the EU integration process.