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Effects of business improvement districts on firm performance, place attractiveness, and urban safety

Author

Listed:
  • Daunfeldt, Sven-Olov

    (Institute of Retail Economics (Handelns Forskningsinstitut))

  • Mihaescu, Oana

    (Institute of Retail Economics (Handelns Forskningsinstitut))

  • Rudholm, Niklas

    (Institute of Retail Economics (Handelns Forskningsinstitut))

Abstract

: Business improvement districts (BIDs) have emerged as possible solutions for the revitalization of urban areas characterized by economic decline. Using a difference-in differences model, we investigate the effects of a voluntary Swedish BID programme in five cities on firm performance, urban safety, and place attractiveness – both within and outside the BID. We find that the BID programme increased labour productivity for incumbent firms within the BID by 7.62%, mainly through an increase in revenues. However, the positive effect of the BID programme on firm performance is largely transitory, decreasing sharply during the third year and then becoming insignificant. We find no statistically significant impacts on firm performance outside the geographical boundaries of the BIDs. The results also suggest that fewer crimes were committed in the BIDs, as the estimates for all years are negative, though they are significant only for the fourth year after BID implementation. Finally, we detect no statistically significant effects of the BID programme on property values either within or outside the designated BIDs.

Suggested Citation

  • Daunfeldt, Sven-Olov & Mihaescu, Oana & Rudholm, Niklas, 2021. "Effects of business improvement districts on firm performance, place attractiveness, and urban safety," HFI Working Papers 24, Institute of Retail Economics (Handelns Forskningsinstitut).
    • Handle: RePEc:hhs:hfiwps:0024
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    More about this item

    Keywords

    : Business improvement district; public–private partnerships; firm performance; labour productivity; property values; crime; difference-in-differences;
    All these keywords.

    JEL classification:

    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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