The regional effects of a place-based policy – Causal evidence from Germany

Brachert, Matthias; Dettmann, Eva; Titze, Mirko

doi:10.1016/j.regsciurbeco.2019.103483

Cited by 49 publications

(24 citation statements)

References 20 publications

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“…To consider this issue we undertook a detailed investigation of all area-based policies we could find that changed in our sample period as documented in online Appendix E. From this, we conclude that the only policy that causes material concerns are the EU structural funds (SF), which support infrastructure projects in roads and energy as well as initiatives for economic and social regeneration of urban areas. 26 As with RSA, the map of EU supported areas focused on disadvantaged areas and of 34.4, which for a 10 percentage point NGE increase implies a 9 percent rise in employment, much closer to our baseline results. Similarly, other transformations such as using the Inverse Hyperbolic Sign gave similar results.…”

Section: B Other Policiessupporting

confidence: 82%

“…25 Since some of the subsidies (and their effects) could persist for longer periods of time after an area becomes eligible, we may be underestimating the longer-term effect as our dataset ends in 2004. 26 The structural funds are the financial tools the European Union uses to implement regional policy (see http:// ec.europa.eu/regional_policy/en/funding/). Past evaluations report mixed results for the effect of structural funds.…”

Section: B Other Policiesmentioning

confidence: 99%

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Some Causal Effects of an Industrial Policy

Criscuolo

Martin

Overman

et al. 2019

American Economic Review

341

152

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We exploit changes in the area-specific eligibility criteria for a program to support jobs through investment subsidies. European rules determine whether an area is eligible for subsidies, and we construct instrumental variables for area eligibility based on parameters of these rule changes. Areas eligible for higher subsidies significantly increased jobs and reduced unemployment. A 10-percentage point increase in the maximum investment subsidy stimulates a 10 percent increase in manufacturing employment. This effect exists solely for small firms: large companies accept subsidies without increasing activity. There are positive effects on investment and employment for incumbent firms but not Total Factor Productivity. (JEL E24, G31, H25, L25, L52, R23)

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Section: B Other Policiessupporting

confidence: 82%

Section: B Other Policiesmentioning

confidence: 99%

Some Causal Effects of an Industrial Policy

Criscuolo

Martin

Overman

et al. 2019

American Economic Review

341

152

View full text Add to dashboard Cite

show abstract

“…These effects are driven by small firms. Similar strategies have been used for other place-based capital schemes including the GRW rules that set maximum levels for different incentives across regions of Germany (Brachert, Dettmann, and Titze 2019;Etzel, Siegloch, and Wehrhöfer 2020) and Law 488/1992 that governs incentives received by firms to invest in lagging areas in Italy (Bronzini and de Blasio 2006). The results are not always positive.…”

Section: Capital Subsidies and Enterprise Zonesmentioning

confidence: 91%

Place-Based Policies and Spatial Disparities across European Cities

Ehrlich

Overman

2020

Journal of Economic Perspectives

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Spatial disparities in income levels and worklessness in the European Union are profound, persistent and may be widening. We describe disparities across metropolitan regions and discuss theories and empirical evidence that help us understand what causes these disparities. Increases in the productivity benefits of cities, the clustering of highly educated workers and increases in their wage premium all play a role. Europe has a long-standing tradition of using capital subsidies, enterprise zones, transport investments and other place-based policies to address these disparities. The evidence suggests these policies may have partially offset increasing disparities but are not sufficient to fully offset the economic forces at work.

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“…The economic efficiency of regional development policies has been frequently examined in the German case (Alecke, Mitze, & Untiedt, 2013;Brachert, Dettmann, & Titze, 2019;Eberle, Brenner, & Mitze, 2019 and others), as well as in the case of European Cohesion Policy. Pieńkowski and Berkowitz (2016) provide an extensive summary on this issue.…”

Section: Introductionmentioning

confidence: 99%

How to improve the quality of life in peripheral and lagging regions by policy measures? Examining the effects of two different policies in Germany

Wardenburg

Brenner

2020

Journal of Regional Science

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Peripheral regions commonly appear to be less attractive to live in and policymakers all over the world are applying various measures to make them more attractive. This paper analyzes the effects of two very different measures: The German municipal fiscal equalization scheme and the German structural funds for economically weak areas (GRW). It focusses on the impact on perceived quality of life, measured through interregional migration between German labor market regions. Using a spatial vector autoregressive panel model, we find evidence that equalization transfers have a significant positive impact on regional net migration and contribute to the aim of regional equity. These effects are especially found for regions with low endogenous fiscal capacities. GRW funding reveals no significant effects on net migration rates in total, but short‐term effects in rural regions.

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The regional effects of a place-based policy – Causal evidence from Germany

Cited by 49 publications

References 20 publications

Some Causal Effects of an Industrial Policy

Some Causal Effects of an Industrial Policy

Place-Based Policies and Spatial Disparities across European Cities

How to improve the quality of life in peripheral and lagging regions by policy measures? Examining the effects of two different policies in Germany

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