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Regionale Wachstumseffekte der GRW-Förderung?: Eine räumlich-ökonometrische Analyse auf Basis deutscher Arbeitsmarktregionen
[Regional Growth Effects of Private Sector Investment Grants in Germany?: A spatial econometric analysis for German labour markets]

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Author Info

  • Alecke, Björn
  • Mitze, Timo
  • Untiedt, Gerhard

Abstract

This paper provides an analysis of the impact of the German “Joint Task for the Improve-ment of Regional Economic Structures” (GRW) on labour productivity growth of 225 German labour market regions for the period 1994 to 2006. The empirical regression approach builds on a “Barro-type” growth equation, where a special focus is given to the policy instrument as additional right hand side regressor. The results show that for different model specifications the direct effect of the regional policy instrument on labour productivity growth remains statistically significant and positive for almost two thirds of the supported labour markets. In order to check for the robustness of the results we also augment the standard regression approach to the field of spatial econometrics. Here the results for the Spatial Lag model show that we observe a strong positive spatial spillover effect for productivity growth among neighbouring regions. If we additionally include further spatial lags of the right hand side regressors in the growth equation, the estimated coefficients for the resulting Spatial Durbin and Spatial Durbin Error model indicate that there is a negative spillover effect from the GRW policy on neighbouring regions. This effect remains stable, if we add further spatial lags of other explanatory variables. The indirect distorting effect of the GRW programme yields to the result that only for about 45% of supported regions a positive overall effect was found (with an initial income level up to 73% of the non-funded West German labour markets).

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 22643.

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Date of creation: May 2010
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Handle: RePEc:pra:mprapa:22643

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Keywords: Investment Grants; Regional Growth; Germany; Spatial Durbin Model;

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References

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  1. Durlauf,S.N. & Johnson,P.A. & Temple,J.R.W., 2004. "Growth econometrics," Working papers 18, Wisconsin Madison - Social Systems.
    • Durlauf, Steven N. & Johnson, Paul A. & Temple, Jonathan R.W., 2005. "Growth Econometrics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 8, pages 555-677 Elsevier.
  2. Marusca De Castris & Guido Pellegrini, 2008. "Identification Of The Spatial Effects Of Industrial Subsidies," Working Papers 0408, CREI Università degli Studi Roma Tre, revised 2008.
  3. Harald Badinger & Thomas Url, 2002. "Determinants of regional unemployment: some evidence from Austria," Regional Studies, Taylor & Francis Journals, vol. 36(9), pages 977-988.
  4. Lammers, Konrad & Niebuhr, Annekatrin, 2002. "Erfolgskontrolle in der deutschen Regionalpolitik: Überblick und Bewertung," HWWA Reports 214, Hamburg Institute of International Economics (HWWA).
  5. Hans-Friedrich Eckey & Reinhold Kosfeld & Matthias Türck, 2007. "Regionale Entwicklung mit und ohne räumliche Spillover-Effekte," Jahrbuch für Regionalwissenschaft, Springer, vol. 27(1), pages 23-42, February.
  6. repec:kas:wpaper:2004-55 is not listed on IDEAS
  7. Gerhard Untiedt & Hans Joachim Schalk, 2000. "Regional investment incentives in Germany: Impacts on factor demand and growth," The Annals of Regional Science, Springer, vol. 34(2), pages 173-195.
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Cited by:
  1. Philipp Breidenbach & Timo Mitze & Christoph Schmidt, 2011. "Evaluating EU Regional Policy: Many Empirical Specifications, One (Unpleasant) Result," ERSA conference papers ersa11p1144, European Regional Science Association.

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