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Regional policy and investment behaviour: The case of Greece, 1971-1982

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  • Louri, Helen

Abstract

The present paper reports an attempt to evaluate the relative effects of regional policy on investment in Greek manufacturing industry during 1971-82. A generalized neoclassical model of investment behaviour is used allowing for separate estimates of the effects of different policy instruments. Both regional investment incentives and infrastructure expenditures were found to exert a significant influence on capital formation. Simulations with alternative policy cornbinations showed that if incentives were accompanied by more equally distributed infrastructure expenditures the cost of the policy would be the same but its effects would be enhanced: an equal amount of investment would be created with a fairer regional distribution.

Suggested Citation

  • Louri, Helen, 1989. "Regional policy and investment behaviour: The case of Greece, 1971-1982," MPRA Paper 40229, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:40229
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    File URL: https://mpra.ub.uni-muenchen.de/40229/1/MPRA_paper_40229.pdf
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    References listed on IDEAS

    as
    1. Helen Louri, 1988. "Urban Growth and Productivity: The Case of Greece," Urban Studies, Urban Studies Journal Limited, vol. 25(5), pages 433-438, October.
    2. Barry P. Bosworth, 1982. "Capital Formation and Economic Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 13(2), pages 273-326.
    3. Robert Eisner, 1978. "Factors in Business Investment," NBER Books, National Bureau of Economic Research, Inc, number eisn78-1, July.
    4. Henderson, J. Vernon, 1986. "Efficiency of resource usage and city size," Journal of Urban Economics, Elsevier, vol. 19(1), pages 47-70, January.
    5. Segal, David, 1976. "Are There Returns to Scale in City Size?," The Review of Economics and Statistics, MIT Press, vol. 58(3), pages 339-350, August.
    6. M. S. Feldstein & J. S. Flemming, 1971. "Tax Policy, Corporate Saving and Investment Behaviour in Britain," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(4), pages 415-434.
    7. Bean, Charles R, 1981. "An Econometric Model of Manufacturing Investment in the UK," Economic Journal, Royal Economic Society, vol. 91(361), pages 106-121, March.
    8. Ronald L. Moomaw, 1981. "Productivity and City Size: A Critique of the Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 96(4), pages 675-688.
    9. Bernanke, Ben S, 1983. "The Determinants of Investment: Another Look," American Economic Review, American Economic Association, vol. 73(2), pages 71-75, May.
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    Citations

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    Cited by:

    1. Nikos Benos & Stelios Karagiannis, 2010. "The Role of Human Capital in Economic Growth: Evidence from Greek Regions," Chapters, in: Neri Salvadori (ed.), Institutional and Social Dynamics of Growth and Distribution, chapter 7, Edward Elgar Publishing.
    2. Benos, Nikos & Karagiannis, Stelios, 2016. "Do education quality and spillovers matter? Evidence on human capital and productivity in Greece," Economic Modelling, Elsevier, vol. 54(C), pages 563-573.
    3. Benos, Nikos & Karagiannis, Stelios, 2013. "Do Cross-Section Dependence and Parameter Heterogeneity Matter? Evidence on Human Capital and Productivity in Greece," MPRA Paper 53326, University Library of Munich, Germany.

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    More about this item

    Keywords

    Regional policy; Investment; Incentives; Greece; Manufacturing;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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