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The Impact of Urban Enterprise Zones on Establishments

Listed author(s):
  • Thierry Mayer

    (Département d'économie)

  • Florian Mayneris

    (Institut de recherches économiques et sociales)

  • Loriane Py

    (Banque de France)

In this article, we study the impact of a French enterprise zone program—the ‘Zones Franches Urbaines’ (ZFUs) policy—on establishment location decisions and on labor market outcomes. Our main identification strategy, which combines spatial and time differencing, shows that conditional on locating in a municipality that hosts a ZFU, the policy has a positive and sizable impact on the probability to locate in the ZFU part rather than in the non-ZFU part of municipalities. However, the impact is highly heterogeneous across zones, industries and firms. We also show that this positive effect is entirely due to within-municipality diversion effects. Regarding labor market outcomes, the policy has a positive effect on employment, especially for low-wage workers. As for wages, the effect is null for low-wage workers, and negative for high-wage ones.

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File URL: http://spire.sciencespo.fr/hdl:/2441/3l4arseauo82kr3cm0qr8uihmg/resources/2015-thierry-mayer-the-impact-of-urban-enterprise-zones.pdf
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Paper provided by Sciences Po in its series Sciences Po publications with number info:hdl:2441/3l4arseauo82kr3cm0qr8uihmg.

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Date of creation: Oct 2015
Publication status: Published in Journal of Economic Geography, 2015, vol. lbv035, pp.1-44
Handle: RePEc:spo:wpmain:info:hdl:2441/3l4arseauo82kr3cm0qr8uihmg
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