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

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  • Brachert, Matthias
  • Dettmann, Eva
  • Titze, Mirko

Abstract

The German government provides discretionary investment grants to structurally weak regions in order to reduce regional inequality. We use a regression discontinuity design that exploits an exogenous discrete jump in the probability of regional actors to receive investment grants to identify the causal effects of the policy. We find positive effects of the programme on district-level gross value-added and productivity growth, but no effects on employment and gross wage growth.

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  • Brachert, Matthias & Dettmann, Eva & Titze, Mirko, 2019. "The regional effects of a place-based policy – Causal evidence from Germany," Regional Science and Urban Economics, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:regeco:v:79:y:2019:i:c:s016604621830382x
    DOI: 10.1016/j.regsciurbeco.2019.103483
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    2. Maximilian v. Ehrlich & Henry G. Overman, 2020. "Place-Based Policies and Spatial Disparities across European Cities," Journal of Economic Perspectives, American Economic Association, vol. 34(3), pages 128-149, Summer.
    3. Tyurchev, Kirill, 2021. "Управление Инновационными Системами: От Национального До Локального Уровня [Management of Innovative Systems: From National to Local LeveL]," MPRA Paper 111908, University Library of Munich, Germany.
    4. Freedman, Matthew & Khanna, Shantanu & Neumark, David, 2023. "JUE Insight: The Impacts of Opportunity Zones on Zone Residents," Journal of Urban Economics, Elsevier, vol. 133(C).
    5. Sven Wardenburg & Thomas Brenner, 2020. "How to improve the quality of life in peripheral and lagging regions by policy measures? Examining the effects of two different policies in Germany," Journal of Regional Science, Wiley Blackwell, vol. 60(5), pages 1047-1073, November.
    6. Lu, Hongyou & Liu, Min & Song, Wenjing, 2022. "Place-based policies, government intervention, and regional innovation: Evidence from China's Resource-Exhausted City program," Resources Policy, Elsevier, vol. 75(C).
    7. Li, Xiaoying & Tang, Jiahong & Huang, Jinyuan, 2023. "Place-based policy upgrading, business environment, and urban innovation: Evidence from high-tech zones in China," International Review of Financial Analysis, Elsevier, vol. 86(C).
    8. Thomas Brenner & Annekatrin Niebuhr, 2021. "Policy options for lagging regions—effects, new approaches and emerging challenges: introduction to the special issue," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 41(2), pages 125-130, October.
    9. Toshihiro Okubo & Tetsuji Okazaki & Eiichi Tomiura, 2022. "Industrial cluster policy and transaction networks: Evidence from firm‐level data in Japan," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(4), pages 1990-2035, November.
    10. Freedman, Matthew & Khanna, Shantanu & Neumark, David, 2023. "Combining rules and discretion in economic development policy: Evidence on the impacts of the California Competes Tax Credit," Journal of Public Economics, Elsevier, vol. 217(C).
    11. Kazakov, Aleksandr & Koetter, Michael & Titze, Mirko & Tonzer, Lena, 2022. "Firm subsidies, financial intermediation, and bank risk," IWH Discussion Papers 2/2022, Halle Institute for Economic Research (IWH).
    12. Yuxi Luo & Zhaohua Zhang & Jun Zheng & Diane Hite, 2021. "The Neighborhood Effects of a Place-Based Policy—Causal Evidence from Atlanta’s Economic Development Priority Areas," Sustainability, MDPI, vol. 13(12), pages 1-16, June.
    13. Irina Yakovenko, 2020. "Fuzzy Stochastic Automation Model for Decision Support in the Process Inter-Budgetary Regulation," Mathematics, MDPI, vol. 9(1), pages 1-17, December.

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    More about this item

    Keywords

    Causal analysis; Place-based policy; Regression discontinuity design;
    All these keywords.

    JEL classification:

    • Z0 - Other Special Topics - - General
    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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