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Place-based Tax Exemptions and Displacement Effects : An Evaluation of the Zones Franches Urbaines Program

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  • Pauline Givord

    ()
    (CREST)

  • Roland Rathelot

    ()
    (CREST)

  • Patrick Sillard

    (INSEE)

Abstract

In this study, we evaluate the impact of the French Zones Franches Urbaines on economic activity. This public-funded place-based program, comparable to US enterprise zones, exempts businesses from taxes for a period of at least five years. For the purpose of this evaluation, we merged several administrative datasets at the company level. This allows us to exhaustively observe business creations and stocks, as well as employment and financial outcomes for companies at specific geographical locations. We focus on the second round of the program, during which treated territories were selected among a pool of deprived areas according to a known set of covariates. The way treatment was assigned makes the conditional independence assumption credible in our case. Overall, we find significant effects on both business creation and employment while the impact on companies that were located in the treated areas before the program is not significant, regardless of the outcome. We also provide evidence of significant negative spillovers of the program on neighboring areas.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Paper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 2011-19.

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Length: 32
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:crs:wpaper:2011-19

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Related research

Keywords: enterprise zones; local employment; place-based policies; propensity-score matching; externalities;

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References

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Citations

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Cited by:
  1. Mayer, Thierry & Mayneris, Florian & Py, Loriane, 2012. "The Impact of Urban Enterprise Zones on Establishments' Location Decisions: Evidence from French ZFUs," CEPR Discussion Papers 9074, C.E.P.R. Discussion Papers.
  2. Anthony Briant & Miren Lafourcade & Benoît Schmutz, 2012. "Can Tax Breaks Beat Geography? Lessons from the French Enterprise Zone Experience," PSE Working Papers halshs-00695225, HAL.
  3. Corentin Trevien & Pauline Givord & Simon Quantin, 2012. "A Long-Term Evaluation of the First Generation of the French Urban Enterprise Zones," ERSA conference papers ersa12p776, European Regional Science Association.
  4. Florian MAYNERIS & Loriane PY, 2013. "The efficiency of enterprise zone programs Some conflicting results?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013025, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  5. Behaghel, Luc & Lorenceau, Adrien & Quantin, Simon, 2013. "Replacing Churches and Mason Lodges? Tax Exemptions and Rural Development," IZA Discussion Papers 7808, Institute for the Study of Labor (IZA).
  6. Florian MAYNERIS & Loriane PY, 2013. "The Efficiency Of Enterprise Zone Programs Some Conflicting Results?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 209-224.
  7. David Neumark & Helen Simpson, 2014. "Place-Based Policies," NBER Working Papers 20049, National Bureau of Economic Research, Inc.
  8. repec:hal:wpaper:halshs-00695225 is not listed on IDEAS
  9. Ooi, Joseph T.L. & Le, Thao T.T., 2013. "The spillover effects of infill developments on local housing prices," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 850-861.

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