Affiliation:
1. University of Bern, Schanzeneckstr 1, CH-3001 Bern, CRED, and CESifo (email: )
2. University of Duisburg-Essen, Lotharstr. 65, D-47057 Duisburg, CRED, and CESifo (email: )
Abstract
Using a natural experiment, we show that temporary place-based subsidies generate persistent effects on economic density. The spatial regression discontinuity design controls for continuous local agglomeration externalities, so we attribute an important role to capital formation in explaining persistent spatial patterns of economic activity. This persistence is driven by higher local public investment levels, which local governments could maintain after the end of the program because of a persistently higher tax base. We also find evidence for significant local relocation of economic activity, which raises doubts that the net effect of the policy is positive. Finally, we show that transfers have capitalized in land rents such that pretreatment landowners have benefited from the program. (JEL H71, H76, O18, R11, R12, R51, R58)
Publisher
American Economic Association
Subject
General Economics, Econometrics and Finance
Cited by
44 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献