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The aim of this paper is to investigate the influence of Common Agricultural Policy(CAP) subsidies on agricultural (labour and total factor) productivity growth of EUregions during the period 2004–2012. The objective is to assess the impact of thispolicy on agricultural growth and competitiveness of regions, first in the aftermath ofthe fundamental reforms of the decoupling policy and second during the historiceastward enlargement of the EU, which deepened asymmetric spatial patterns andmay have led to the CAP having a different spatial impact. The analysis uses aneconometric approach based on an augmented Cobb-Douglas production function.The impact is proved to be mixed; positive when thechangeof subsidies with a 1-year lag is considered, which is related to farm strategies, and negative when thelevelof subsidies, which is based on reference data, is considered. In the case of the newmember states, the effect is negative, confirming the CAP’s incompatibility with theagricultural structures of the area.


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