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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]


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


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).

Suggested Citation

  • Alecke, Björn & Mitze, Timo & Untiedt, Gerhard, 2010. "Regionale Wachstumseffekte der GRW-Förderung?: Eine räumlich-ökonometrische Analyse auf Basis deutscher Arbeitsmarktregionen
    [Regional Growth Effects of Private Sector Investment Grants in Germany?
    ," MPRA Paper 22643, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:22643

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    References listed on IDEAS

    1. 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. Harald Badinger & Thomas Url, 2002. "Determinants of regional unemployment: some evidence from Austria," Regional Studies, Taylor & Francis Journals, vol. 36(9), pages 977-988.
    3. 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.
    4. Lammers, Konrad & Niebuhr, Annekatrin, 2002. "Erfolgskontrolle in der deutschen Regionalpolitik: Überblick und Bewertung," HWWA Reports 214, Hamburg Institute of International Economics (HWWA).
    5. Brambor, Thomas & Clark, William Roberts & Golder, Matt, 2006. "Understanding Interaction Models: Improving Empirical Analyses," Political Analysis, Cambridge University Press, vol. 14(01), pages 63-82, December.
    6. Hans-Friedrich Eckey & Reinhold Kosfeld & Matthias Türck, 2007. "Regionale Entwicklung mit und ohne räumliche Spillover-Effekte," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 27(1), pages 23-42, February.
    7. Gerhard Untiedt & Hans Joachim Schalk, 2000. "Regional investment incentives in Germany: Impacts on factor demand and growth," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 34(2), pages 173-195.
    8. J. Barkley Rosser, 2009. "Introduction," Chapters,in: Handbook of Research on Complexity, chapter 1 Edward Elgar Publishing.
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    Cited by:

    1. K. Haaf & C.J.M. Kool, 2017. "Determinants of regional growth and convergence in Germany," Working Papers 17-12, Utrecht School of Economics.
    2. Jonathan Eberle & Thomas Brenner, 2016. "More bucks, more growth, more justice? The effects of regional structural funds on regional economic growth and convergence in Germany," Working Papers on Innovation and Space 2016-01, Philipps University Marburg, Department of Geography.
    3. 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.

    More about this item


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

    JEL classification:

    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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