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Fiscal Design and the Location of Economic Activity

  • Ulrike Stierle-von Schütz

    ()

In the process of economic integration regional production structures are about to change. Several studies analysed already trends of regional specialization in the European Union and attempted to figure out determinants of observed changes. In this context, up to date the role of the public sector and especially the impact of different fiscal designs as determinants of the change in production structures have been left aside. Advantages and shortcomings of decentralized government organization have been largely discussed theoretically within the last decades. Several empirical studies attempted to examine the impact of decentralization on national performance, e.g. economic growth and fiscal stability. This paper aims at linking these two subjects and analyzes the empirical relationship between regional specialization and fiscal decentralization for a panel of 15 Member States of the European Union, controlling for regional and other institutional determinants. The analysis shows that rather autonomous regions tend to diverse their production structure in order to insure against adverse supply shocks.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p539.

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Date of creation: Aug 2005
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Handle: RePEc:wiw:wiwrsa:ersa05p539
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  1. Marius BRÜLHART & Federico TRIONFETTI, 2000. "Public Expenditure and International Specialisation," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 00.23, Université de Lausanne, Faculté des HEC, DEEP.
  2. Steven Brakman & Harry Garretsen & Marc Schramm, 2004. "The strategic bombing of German cities during World War II and its impact on city growth," Journal of Economic Geography, Oxford University Press, vol. 4(2), pages 201-218, April.
  3. Sørensen, Bent E & Yosha, Oved, 1999. "Risk Sharing and Industrial Specialization: Regional and International Evidence," CEPR Discussion Papers 2295, C.E.P.R. Discussion Papers.
  4. Stegarescu, Dan, 2004. "Public Sector Decentralization: Measurement Concepts and Recent International Trends," ZEW Discussion Papers 04-74, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  5. Donald R. Davis & David E. Weinstein, 2002. "Bones, Bombs, and Break Points: The Geography of Economic Activity," American Economic Review, American Economic Association, vol. 92(5), pages 1269-1289, December.
  6. Pierre-Philippe Combes & Henry Overman, 2003. "The Spatial Distribution of Economic Activities in the European Union," CEP Discussion Papers dp0587, Centre for Economic Performance, LSE.
  7. Baldwin, Richard E. & Krugman, Paul, 2004. "Agglomeration, integration and tax harmonisation," European Economic Review, Elsevier, vol. 48(1), pages 1-23, February.
  8. Donald R. Davis & David E. Weinstein, 2004. "A search for multiple equilibria in urban industrial structure," Discussion Papers 0304-12, Columbia University, Department of Economics.
  9. Mary Amiti, 1999. "Specialization patterns in Europe," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(4), pages 573-593, December.
  10. Combes, Pierre-Philippe & Lafourcade, Miren, 2001. "Transport Cost Decline and Regional Inequalities: Evidence from France," CEPR Discussion Papers 2894, C.E.P.R. Discussion Papers.
  11. Andersson, Fredrik & Forslid, Rikard, 1999. "Tax Competition and Economic Geography," CEPR Discussion Papers 2220, C.E.P.R. Discussion Papers.
  12. Stirböck, Claudia, 2004. "Comparing Investment and Employment Specialisation Patterns of EU Regions," ZEW Discussion Papers 04-43, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  13. Karl Aiginger & Wolfgang Leitner, 2002. "Regional concentration in the United States and Europe: Who follows whom?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(4), pages 652-679, December.
  14. Krieger-Boden, Christiane, 1999. "Nationale und regionale Spezialisierungsmuster im europäischen Integrationsprozeß," Open Access Publications from Kiel Institute for the World Economy 2294, Kiel Institute for the World Economy (IfW).
  15. Ulrich Thießen, 2003. "Fiscal Decentralisation and Economic Growth in High-Income OECD Countries," Fiscal Studies, Institute for Fiscal Studies, vol. 24(3), pages 237-274, September.
  16. Ebel, Robert D. & Yilmaz, Serdar, 2002. "On the measurement and impact of fiscal decentralization," Policy Research Working Paper Series 2809, The World Bank.
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