IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Beyond the SUTVA: how policy evaluations change when we allow for interactions among firms

  • Augusto Cerqua

    (Dipartimento di Scienze Sociali ed Economiche, Sapienza University of Rome)

  • Guido Pellegrini

    ()

    (Dipartimento di Scienze Sociali ed Economiche, Sapienza University of Rome)

The shortage of studies on spatial spillovers of industrial policies is rather surprising considering that such policies are usually designed for generating spatial externalities. In this paper we propose a new framework that partially relaxes the SUTVA and allows contrasting the positive agglomeration effects with the negative cross-sectional substitution and the crowding-out effect. The global evaluation of the ATT and the spillover parameters shifts the spotlight from the policy effect on subsidised firms to the global effect of the industrial policy on the targeted territory. Analysing a capital subsidy policy in Italy we find a positive and large effect of the policy on subsidised firms in terms of investment, turnover, and employment; however, the employment growth is in part determined to the detriment of affected untreated firms located in the very proximity of one or more treated firms that belong to the same sector of activity.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.diss.uniroma1.it/sites/default/files/allegati/WP_DiSSE_02_14_Cerqua_Pellegrini.pdf
Download Restriction: no

Paper provided by Sapienza University of Rome, DISS in its series Working Papers with number 2/14.

as
in new window

Length:
Date of creation: Apr 2014
Date of revision:
Handle: RePEc:saq:wpaper:2/14
Contact details of provider: Postal:
Piazzale Aldo Moro, 5 - 00184 ROMA

Phone: +39+06491914 (int. 20563)
Fax: +39+06491914 (int. 20563)
Web page: http://www.diss.uniroma1.it/
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Melo, Patricia C. & Graham, Daniel J. & Noland, Robert B., 2009. "A meta-analysis of estimates of urban agglomeration economies," Regional Science and Urban Economics, Elsevier, vol. 39(3), pages 332-342, May.
  2. Corentin Trevien & Pauline Givord & Simon Quantin, 2012. "A Long-Term Evaluation of the First Generation of the French Urban Enterprise Zones," ERSA conference papers ersa12p776, European Regional Science Association.
  3. Stuart S. Rosenthal & William C. Strange, 1999. "Geography, Industrial Organization, and Agglomeration," Center for Policy Research Working Papers 14, Center for Policy Research, Maxwell School, Syracuse University.
  4. Chiara Criscuolo & Ralf Martin & Henry G. Overman & John Van Reenen, 2012. "The Causal Effects of an Industrial Policy," CEP Discussion Papers dp1113, Centre for Economic Performance, LSE.
  5. Richard Harris & Mary Trainor, 2007. "Impact of Government Intervention on Employment Change and Plant Closure in Northern Ireland, 1983-97," Regional Studies, Taylor & Francis Journals, vol. 41(1), pages 51-63.
  6. Ham, John C. & Swenson, Charles & Imrohoroglu, Ayse & Song, Heonjae, 2011. "Government programs can improve local labor markets: Evidence from State Enterprise Zones, Federal Empowerment Zones and Federal Enterprise Community," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 779-797, August.
  7. Gilles Duranton & Henry G. Overman, 2005. "Testing for localization using micro-geographic data," LSE Research Online Documents on Economics 581, London School of Economics and Political Science, LSE Library.
  8. Alf Erko Lublinski, 2003. "Does Geographic Proximity Matter? Evidence from Clustered and Non-clustered Aeronautic Firms in Germany," Regional Studies, Taylor & Francis Journals, vol. 37(5), pages 453-467.
  9. Jofre-Monseny, Jordi & Marín-López, Raquel & Viladecans-Marsal, Elisabet, 2011. "The mechanisms of agglomeration: Evidence from the effect of inter-industry relations on the location of new firms," Journal of Urban Economics, Elsevier, vol. 70(2), pages 61-74.
  10. Richard Blundell & Mónica Costa Dias, 2008. "Alternative Approaches to Evaluation in Empirical Microeconomics," CEF.UP Working Papers 0805, Universidade do Porto, Faculdade de Economia do Porto.
  11. repec:cep:cepdps:dp01113 is not listed on IDEAS
  12. Bernini, Cristina & Pellegrini, Guido, 2011. "How are growth and productivity in private firms affected by public subsidy? Evidence from a regional policy," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 253-265, May.
  13. Accetturo, Antonio & de Blasio, Guido, 2012. "Policies for local development: An evaluation of Italy's “Patti Territoriali”," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 15-26.
  14. J. Vernon Henderson & Ari Kuncoro & Matthew Turner, 1992. "Industrial Development in Cities," NBER Working Papers 4178, National Bureau of Economic Research, Inc.
  15. Karl Aiginger, 2007. "Industrial Policy: A Dying Breed or A Re-emerging Phoenix," Journal of Industry, Competition and Trade, Springer, vol. 7(3), pages 297-323, December.
  16. 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.
  17. Austan Goolsbee, 1998. "Investment Tax Incentives, Prices, and the Supply of Capital Goods," The Quarterly Journal of Economics, Oxford University Press, vol. 113(1), pages 121-148.
  18. Giuseppe Espa & Giuseppe Arbia & Diego Giuliani, 2013. "Conditional versus unconditional industrial agglomeration: disentangling spatial dependence and spatial heterogeneity in the analysis of ICT firms’ distribution in Milan," Journal of Geographical Systems, Springer, vol. 15(1), pages 31-50, January.
  19. Matthew Blackwell & Stefano Iacus & Gary King & Giuseppe Porro, 2010. "CEM: Coarsened Exact Matching in Stata," BOS10 Stata Conference 8, Stata Users Group.
  20. Matthias Duschl & Tobias Scholl & Thomas Brenner & Dennis Luxen & Falk Raschke, 2012. "Industry-specific firm growth and aggolmeration," Working Papers on Innovation and Space 2012-06, Philipps University Marburg, Department of Geography.
  21. Fabrizio Barca & Philip McCann & Andrés Rodríguez‐Pose, 2012. "The Case For Regional Development Intervention: Place‐Based Versus Place‐Neutral Approaches," Journal of Regional Science, Wiley Blackwell, vol. 52(1), pages 134-152, 02.
  22. Becker, Sascha O. & Egger, Peter H. & von Ehrlich, Maximilian, 2012. "Too much of a good thing? On the growth effects of the EU's regional policy," European Economic Review, Elsevier, vol. 56(4), pages 648-668.
  23. Bronzini, Raffaello & de Blasio, Guido, 2006. "Evaluating the impact of investment incentives: The case of Italy's Law 488/1992," Journal of Urban Economics, Elsevier, vol. 60(2), pages 327-349, September.
  24. Eric Marcon & Florence Puech, 2010. "Measures of the geographic concentration of industries: improving distance-based methods," Journal of Economic Geography, Oxford University Press, vol. 10(5), pages 745-762, September.
  25. Faini, Riccardo, 1999. "Trade unions and regional development," European Economic Review, Elsevier, vol. 43(2), pages 457-474, February.
  26. Guido Pellegrini & Flavia Terribile & Ornella Tarola & Teo Muccigrosso & Federica Busillo, 2013. "Measuring the effects of European Regional Policy on economic growth: A regression discontinuity approach," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 217-233, 03.
  27. 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, January.
  28. Thomas Farole & Andrés Rodríguez‐Pose & Michael Storper, 2011. "Cohesion Policy in the European Union: Growth, Geography, Institutions," Journal of Common Market Studies, Wiley Blackwell, vol. 49(5), pages 1089-1111, 09.
  29. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2011. "Multivariate Matching Methods That Are Monotonic Imbalance Bounding," Journal of the American Statistical Association, American Statistical Association, vol. 106(493), pages 345-361.
  30. Hanson, Andrew & Rohlin, Shawn, 2013. "Do spatially targeted redevelopment programs spillover?," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 86-100.
  31. 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.
  32. 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.
  33. Devereux, Michael P. & Griffith, Rachel & Simpson, Helen, 2007. "Firm location decisions, regional grants and agglomeration externalities," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 413-435, April.
  34. Bondonio, Daniele, 2009. "Impact identification strategies for evaluating business incentive programs," POLIS Working Papers 129, Institute of Public Policy and Public Choice - POLIS.
  35. Arpino, Bruno & Mattei, Alessandra, 2013. "Assessing the Impact of Financial Aids to Firms: Causal Inference in the presence of Interference," MPRA Paper 51795, University Library of Munich, Germany.
  36. Johansson, Börje, 2004. "Parsing the Menagerie of Agglomeration and Network Externalities," Working Paper Series in Economics and Institutions of Innovation 2, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  37. Valentina Adorno & Cristina Bernini & Guido Pellegrini, 2007. "The Impact of Capital Subsidies: New Estimations under Continuous Treatment," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 66(1), pages 67-92, March.
  38. Rainald Borck & Hyun-Ju Koh & Michael Pflüger, 2009. "Inefficient Lock-in and Subsidy Competition," CESifo Working Paper Series 2592, CESifo Group Munich.
  39. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
  40. Gerhard Untiedt & Hans Joachim Schalk, 2000. "Regional investment incentives in Germany: Impacts on factor demand and growth," The Annals of Regional Science, Springer, vol. 34(2), pages 173-195.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:saq:wpaper:2/14. 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: (Pierluigi Montalbano)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.