IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/85326.html
   My bibliography  Save this paper

Local multipliers at work

Author

Listed:
  • Cerqua, Augusto
  • Pellegrini, Guido

Abstract

We measure the effects of a substantial place-based policy shock on the local labor market systems exploiting as an instrumental variable the peculiar information necessary to apply for capital subsidies in Italy during the period 1996-2006. The results show the presence of positive multipliers in the South of Italy, slightly lower than what was previously found for the US but much higher than those identified for European and Asian countries. The reasons for this finding lie in the greater accuracy of the data, in the relevance of the instrument used, and in the widespread underutilization of production factors.

Suggested Citation

  • Cerqua, Augusto & Pellegrini, Guido, 2018. "Local multipliers at work," MPRA Paper 85326, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:85326
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/85326/1/MPRA_paper_85326.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Sascha O. Becker & Peter H. Egger & Maximilian von Ehrlich, 2013. "Absorptive Capacity and the Growth and Investment Effects of Regional Transfers: A Regression Discontinuity Design with Heterogeneous Treatment Effects," American Economic Journal: Economic Policy, American Economic Association, vol. 5(4), pages 29-77, November.
    2. Sachiko Kazekami, 2017. "Local Multipliers, Mobility, and Agglomeration Economies," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(3), pages 489-513, July.
    3. Daniel J. Wilson, 2012. "Fiscal Spending Jobs Multipliers: Evidence from the 2009 American Recovery and Reinvestment Act," American Economic Journal: Economic Policy, American Economic Association, vol. 4(3), pages 251-282, August.
    4. Augusto Cerqua & Guido Pellegrini, 2017. "Industrial policy evaluation in the presence of spillovers," Small Business Economics, Springer, vol. 49(3), pages 671-686, October.
    5. Elias Einiö & Henry G. Overman, 2016. "The (Displacement) Effects of Spatially Targeted Enterprise Initiatives: Evidence from UK LEGI," SERC Discussion Papers 0191, Spatial Economics Research Centre, LSE.
    6. Gilles Duranton & Laurent Gobillon & Henry G. Overman, 2011. "Assessing the Effects of Local Taxation using Microgeographic Data," Economic Journal, Royal Economic Society, vol. 121(555), pages 1017-1046, September.
    7. Federico Belotti & Edoardo Di Porto & Gianluca Santoni, 2018. "Spatial Differencing: Estimation and Inference," CESifo Economic Studies, CESifo, vol. 64(2), pages 241-254.
    8. Faggio, Giulia & Overman, Henry, 2014. "The effect of public sector employment on local labour markets," Journal of Urban Economics, Elsevier, vol. 79(C), pages 91-107.
    9. Cerqua, Augusto & Pellegrini, Guido, 2014. "Do subsidies to private capital boost firms' growth? A multiple regression discontinuity design approach," Journal of Public Economics, Elsevier, vol. 109(C), pages 114-126.
    10. Gabriel Chodorow-Reich, 2019. "Geographic Cross-Sectional Fiscal Spending Multipliers: What Have We Learned?," American Economic Journal: Economic Policy, American Economic Association, vol. 11(2), pages 1-34, May.
    11. Gabriel Chodorow-Reich & Laura Feiveson & Zachary Liscow & William Gui Woolston, 2012. "Does State Fiscal Relief during Recessions Increase Employment? Evidence from the American Recovery and Reinvestment Act," American Economic Journal: Economic Policy, American Economic Association, vol. 4(3), pages 118-145, August.
    12. Juan Carlos Suárez Serrato & Philippe Wingender, 2016. "Estimating Local Fiscal Multipliers," NBER Working Papers 22425, National Bureau of Economic Research, Inc.
    13. Daniel Shoag, 2013. "Using State Pension Shocks to Estimate Fiscal Multipliers since the Great Recession," American Economic Review, American Economic Association, vol. 103(3), pages 121-124, May.
    14. Enrico Moretti & Per Thulin, 2013. "Local multipliers and human capital in the United States and Sweden," Industrial and Corporate Change, Oxford University Press, vol. 22(1), pages 339-362, February.
    15. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, july-dece.
    16. James P. LeSage, 2014. "What Regional Scientists Need to Know about Spatial Econometrics," The Review of Regional Studies, Southern Regional Science Association, vol. 44(1), pages 13-32, Spring.
    17. Monica Andini & Guido de Blasio, 2016. "Local development that money cannot buy: Italy’s Contratti di Programma," Journal of Economic Geography, Oxford University Press, vol. 16(2), pages 365-393.
    18. Margherita Gerolimetto & Stefano Magrini, 2014. "Spatial analysis of employment multilpliers in Spanish labor markets," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - Italian Review of Economics, Demography and Statistics, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 68(3-4), pages 87-94, July-Dece.
    19. Emi Nakamura & J?n Steinsson, 2014. "Fiscal Stimulus in a Monetary Union: Evidence from US Regions," American Economic Review, American Economic Association, vol. 104(3), pages 753-792, March.
    20. Ting Wang & Areendam Chanda, 2016. "Manufacturing Growth and Local Multipliers in China," Departmental Working Papers 2016-02, Department of Economics, Louisiana State University.
    21. Marusca de Castris & Guido Pellegrini, 2012. "Evaluation of Spatial Effects of Capital Subsidies in the South of Italy," Regional Studies, Taylor & Francis Journals, vol. 46(4), pages 525-538, June.
    22. Augusto Cerqua & Guido Pellegrini, 2018. "Are we spending too much to grow? The case of Structural Funds," Journal of Regional Science, Wiley Blackwell, vol. 58(3), pages 535-563, June.
    23. G. de Blasio & C. Menon, 2011. "Local Effects of Manufacturing Employment Growth in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 70(3), pages 101-112, December.
    24. Gilles Duranton & Laurent Gobillon & Henry G. Overman, 2011. "Assessing the Effects of Local Taxation using Microgeographic Data," Economic Journal, Royal Economic Society, vol. 121(555), pages 1017-1046, September.
    25. Margherita Gerolimetto & Stefano Magrini, 2016. "A spatial analysis of employment multipliers in the US," Letters in Spatial and Resource Sciences, Springer, vol. 9(3), pages 277-285, October.
    26. David M. Drukker & Ingmar Prucha & Rafal Raciborski, 2013. "A command for estimating spatial-autoregressive models with spatial-autoregressive disturbances and additional endogenous variables," Stata Journal, StataCorp LP, vol. 13(2), pages 287-301, June.
    27. Paul Goldsmith-Pinkham & Isaac Sorkin & Henry Swift, 2018. "Bartik Instruments: What, When, Why, and How," NBER Working Papers 24408, National Bureau of Economic Research, Inc.
    28. Baum-Snow, Nathaniel & Ferreira, Fernando, 2015. "Causal Inference in Urban and Regional Economics," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 3-68, Elsevier.
    29. Jasper Jacob van Dijk, 2017. "Local employment multipliers in U.S. cities," Journal of Economic Geography, Oxford University Press, vol. 17(2), pages 465-487.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Local multiplier; place-based policy; local labor market.;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:85326. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.