The Persistent Effects of Place-Based Policy: Evidence from the West-German Zonenrandgebiet

von Ehrlich, Maximilian; Seidel, Tobias (May 2015). The Persistent Effects of Place-Based Policy: Evidence from the West-German Zonenrandgebiet (CESifo Working Papers 5373). Munich: CESifo Working Paper

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We show that temporary place-based subsidies generate persistent effects on economic density. As our design allows us to control for agglomeration economies, we attribute an important role to policy-induced locational advantage (e.g. capital structures) in explaining persistent spatial patterns of economic activity. With regard to distributional implications, we show that subsidies have capitalized in land rents, so pre-treatment land-owners have bene- fitted predominantly from the program. Finally, accounting for regional subsidies raises the causal effect of market access as identified in Redding and Sturm (2008) by about 45 percent.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Public Economics
11 Centers of Competence > Center for Regional Economic Development (CRED)

UniBE Contributor:

von Ehrlich, Maximilian

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

2364- 1428

Series:

CESifo Working Papers

Publisher:

CESifo Working Paper

Language:

English

Submitter:

Simon Büchler

Date Deposited:

02 Aug 2017 15:50

Last Modified:

02 Aug 2017 15:50

Uncontrolled Keywords:

Place-based policy; economic geography; persistence; locational advantage; land value capitalization

JEL Classification:

R12, R38, H25, H54, O18

BORIS DOI:

10.7892/boris.95006

URI:

https://boris.unibe.ch/id/eprint/95006

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