European Structural Funds and the Reindustrialization of Romania: Sectoral and Regional Evidence
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| Pages: | 15 : 30 |
| Abstract: | European funds have played a central role in supporting Romania’s reindustrialization process by financing public and private investments aimed at modernization, technological upgrading, and sustainable industrial development. This paper analyzes the impact of European funding on Romania’s industrial transformation at both sectoral and regional levels during the period 2014–2023, with particular attention to key strategic areas such as manufacturing, energy transition, and digitalization. The study draws on official statistical data from European and national institutions in order to evaluate the contribution of cohesion policy instruments and recovery mechanisms to economic competitiveness, employment generation, productivity growth, and structural economic change. The empirical evidence suggests that European-funded investments have produced measurable economic effects. Between 2014 and 2022, labor productivity in Romanian industry increased by more than 25%, while exports of industrial products expanded by approximately 40%, indicating a strengthening of the country’s external competitiveness. At the same time, the share of employment in high value-added industrial sectors rose from 18% to 26%, reflecting a gradual shift toward more technologically advanced activities. Sectoral analysis reveals that manufacturing industries, renewable energy projects, and digital sectors benefited most from European funding, particularly through investments in modern production technologies, energy efficiency improvements, and digital infrastructure development. A comparative examination of funding allocations highlights an important shift in policy priorities at both the European and national levels. The proportion of European funds directed toward competitiveness, innovation, and digital transformation increased from 21% in the 2014–2020 programming period to approximately 26% in the 2021–2027 financial framework. Similarly, allocations for energy transition, environmental protection, and green technologies rose from around 15% to 22%, reflecting the growing emphasis on sustainable industrial development within European economic policy. Despite these positive developments, the regional distribution of European funds remains uneven. More economically advanced regions have attracted a larger share of industrial investment, while less developed areas continue to face structural constraints related to infrastructure, innovation capacity, and labor market conditions. The findings therefore suggest that although European funds have significantly contributed to Romania’s reindustrialization process, achieving balanced and sustainable industrial development requires a more strategic and regionally differentiated approach. Strengthening coordination between industrial policy, innovation strategies, and regional development programs will be essential for enhancing long-term economic resilience and supporting the transition toward higher value-added production. |
| JEL classification: | O14, R11, H54, F36 |
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O14, R11, H54, F36
