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Can Tax Breaks Beat Geography? Lessons from the French Enterprise Zone Experience

Author

Listed:
  • Anthony Briant

    () (PSE - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Miren Lafourcade

    (RITM - Réseaux Innovation Territoires et Mondialisation - UP11 - Université Paris-Sud - Paris 11, PSE - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Benoît Schmutz

    () (Howard University)

Abstract

This paper shows that urban geography matters to the effectiveness of place-based policies, using the French enterprise zone program as a case study. Whereas this program created more jobs in spatially integrated neighborhoods, its impact on local wages was only visible in the more isolated ones. In addition, a focus on the average impact of the program would lead to the conclusion that it mostly succeeded in displacing preexisting firms, but a lower level of spatial isolation was a clear determinant of the decision to create new firms from scratch.

Suggested Citation

  • Anthony Briant & Miren Lafourcade & Benoît Schmutz, 2015. "Can Tax Breaks Beat Geography? Lessons from the French Enterprise Zone Experience," PSE - Labex "OSE-Ouvrir la Science Economique" halshs-01156460, HAL.
  • Handle: RePEc:hal:pseose:halshs-01156460
    DOI: 10.1257/pol.20120137
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01156460
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    Cited by:

    1. Thierry Mayer & Florian Mayneris & Loriane Py, 2015. "The Impact of Urban Enterprise Zones on Establishments," Sciences Po publications info:hdl:2441/3l4arseauo8, Sciences Po.
    2. repec:eee:deveco:v:130:y:2018:i:c:p:173-189 is not listed on IDEAS
    3. Wenhua Di & Daniel L. Millimet, 2017. "Targeted business incentives and the debt behavior of households," Empirical Economics, Springer, vol. 52(3), pages 1115-1142, May.
    4. repec:eee:regeco:v:77:y:2019:i:c:p:315-339 is not listed on IDEAS
    5. Pierre M. Picard & Yves Zenou, "undated". "Urban spatial structure, employment and social ties," CORE Discussion Papers RP 3031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. repec:eee:juecon:v:105:y:2018:i:c:p:149-161 is not listed on IDEAS
    7. Picard, Pierre M. & Zenou, Yves, 2018. "Urban spatial structure, employment and social ties," Journal of Urban Economics, Elsevier, vol. 104(C), pages 77-93.
    8. repec:gam:jsusta:v:10:y:2018:i:1:p:45-:d:125112 is not listed on IDEAS
    9. Sachiko Kazekami, 2017. "Evaluating place-based job creation programs in Japan," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-27, December.
    10. Simon Alder & Lin Shao & Fabrizio Zilibotti, 2016. "Economic reforms and industrial policy in a panel of Chinese cities," Journal of Economic Growth, Springer, vol. 21(4), pages 305-349, December.
    11. Thierry Mayer & Florian Mayneris & Loriane Py, 2017. "The impact of Urban Enterprise Zones on establishment location decisions and labor market outcomes: evidence from France," Journal of Economic Geography, Oxford University Press, vol. 17(4), pages 709-752.
    12. González-Pampillón, Nicolás & Jofre-Monseny, Jordi & Viladecans-Marsal, Elisabet, 2016. "Can Urban Renewal Policies Reverse Neighborhood Ethnic Dynamics?," CEPR Discussion Papers 11676, C.E.P.R. Discussion Papers.
    13. Button, Patrick, 2019. "Do tax incentives affect business location and economic development? Evidence from state film incentives," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 315-339.
    14. Givord, Pauline & Quantin, Simon & Trevien, Corentin, 2018. "A long-term evaluation of the first generation of French urban enterprise zones," Journal of Urban Economics, Elsevier, vol. 105(C), pages 149-161.
    15. Helm, Ines, 2019. "National Industry Trade Shocks, Local Labor Markets, and Agglomeration Spillovers," Research Papers in Economics 2019:1, Stockholm University, Department of Economics.
    16. Bezin, Emeline & Verdier, Thierry & Zenou, Yves, 2018. "Crime, Broken Families, and Punishment," CEPR Discussion Papers 13014, C.E.P.R. Discussion Papers.
    17. Picard, Pierre M. & Zenou, Yves, 2015. "Urban Spatial Structure, Employment and Social Ties: European versus American Cities," IZA Discussion Papers 9166, Institute of Labor Economics (IZA).
    18. Agustin Redonda, 2016. "Tax Expenditures and Sustainability. An Overview," Discussion Notes 1603, Council on Economic Policies.
    19. Proost, Stef & Thisse, Jacques-François, 2015. "Skilled Cities, Regional Disparities, and Efficient Transport: The state of the art and a research agenda," CEPR Discussion Papers 10790, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Business Taxes;

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • R34 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Input Demand Analysis
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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