The Differential Impact of Regional Policies on Economic Growth: One Size Does Not Fit All
We analyze the impact of Michigan economic development policies and highway infrastructure improvements on per capita income and job growth in 1990s using fixed effect estimation procedure. We also improve measurement of policy treatment while accounting for possible spillover effect. The policies considered for analysis have significant impact on growth outcomes. However this effect is non-linear. The size of this impact changes over time and the path of change varies by type of policy. Policy impacts are different between metro and non-metropolitan areas. Also, cross-policy effects are found. The results can assist decision makers in targeting policies.
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