Does regional redistribution spur growth?

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Does regional redistribution spur growth?

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Koetter, Michael
Wedow, Michael

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Abstract

After the German reunification, interregional subsidies accounted for approximately four percent of gross fixed capital investment in the new federal states. We show that between 1992 and 2005 infrastructure and (small) business aid had a negative net impact on regional economic growth. This suggests that regional redistribution was ineffective, potentially due to a lack of spatial concentration to create growth poles. --

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Paper provided by Deutsche Bundesbank, Research Centre in its series Discussion Paper Series 1: Economic Studies with number 2008,28.

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Date of creation: 2008
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Handle: RePEc:zbw:bubdp1:7567

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Find related papers by JEL classification:
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
R58 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Regional Development Policy
R42 - Urban, Rural, and Regional Economics - - Transportation Systems - - - Government and Private Investment Analysis

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Michael Funke & Annekatrin Niebuhr, 2005. "Threshold Effects and Regional Economic Growth-Evidence from West Germany," Quantitative Macroeconomics Working Papers 20503, Hamburg University, Department of Economics. [Downloadable!]
Other versions:
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Raghuram G. Rajan & Arvind Subramanian, 2005. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," NBER Working Papers 11513, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
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