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Fiscal Design and the Location of Economic Activity

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Author Info
Ulrike Stierle-von Schütz ()

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Abstract

In the process of economic integration regional production structures are about to change. Several studies analysed already trends of regional specialization in the European Union and attempted to figure out determinants of observed changes. In this context, up to date the role of the public sector and especially the impact of different fiscal designs as determinants of the change in production structures have been left aside. Advantages and shortcomings of decentralized government organization have been largely discussed theoretically within the last decades. Several empirical studies attempted to examine the impact of decentralization on national performance, e.g. economic growth and fiscal stability. This paper aims at linking these two subjects and analyzes the empirical relationship between regional specialization and fiscal decentralization for a panel of 15 Member States of the European Union, controlling for regional and other institutional determinants. The analysis shows that rather autonomous regions tend to diverse their production structure in order to insure against adverse supply shocks.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p539.

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Date of creation: Aug 2005
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Handle: RePEc:wiw:wiwrsa:ersa05p539

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  1. Combes, Pierre-Philippe & Overman, Henry G., 2004. "The spatial distribution of economic activities in the European Union," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 64, pages 2845-2909 Elsevier. [Downloadable!] (restricted)
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  2. Stirböck, Claudia, 2004. "Comparing Investment and Employment Specialisation Patterns of EU Regions," ZEW Discussion Papers 04-43, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  3. Fredrik Andersson & Rikard Forslid, 2003. "Tax Competition and Economic Geography," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(2), pages 279-303, 04. [Downloadable!] (restricted)
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  4. Donald R. Davis & David E. Weinstein, 2004. "A Search for Multiple Equilibria in Urban Industrial Structure," NBER Working Papers 10252, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Steven Brakman & Harry Garretsen & Marc Schramm, 2004. "The strategic bombing of German cities during World War II and its impact on city growth," Journal of Economic Geography, Oxford University Press, vol. 4(2), pages 201-218, April.
  6. Karl Aiginger & Wolfgang Leitner, 2002. "Regional concentration in the United States and Europe: Who follows whom?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(4), pages 652-679, December. [Downloadable!] (restricted)
  7. Stegarescu, Dan, 2004. "Public Sector Decentralization : Measurement Concepts and Recent International Trends," ZEW Discussion Papers 04-74, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  8. Baldwin, Richard E. & Krugman, Paul, 2004. "Agglomeration, integration and tax harmonisation," European Economic Review, Elsevier, vol. 48(1), pages 1-23, February. [Downloadable!] (restricted)
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  9. Sebnem Kalemli-Ozcan & Bent E. Sørensen & Oved Yosha, 2003. "Risk Sharing and Industrial Specialization: Regional and International Evidence," American Economic Review, American Economic Association, vol. 93(3), pages 903-918, June. [Downloadable!]
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  10. Combes, Pierre-Philippe & Lafourcade, Miren, 2001. "Transport Cost Decline and Regional Inequalities: Evidence from France," CEPR Discussion Papers 2894, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  11. Donald R. Davis & David E. Weinstein, 2001. "Bones, Bombs and Break Points: The Geography of Economic Activity," NBER Working Papers 8517, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Mary Amiti, 1999. "Specialization patterns in Europe," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(4), pages 573-593, December. [Downloadable!] (restricted)
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  13. Ulrich Thießen, 2003. "Fiscal Decentralisation and Economic Growth in High-Income OECD Countries," Fiscal Studies, Institute for Fiscal Studies, vol. 24(3), pages 237-274, September.
  14. Brulhart, Marius & Trionfetti, Federico, 2001. "Public Expenditure and International Specialisation," Discussion Paper Series 26299, Hamburg Institute of International Economics. [Downloadable!]
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