The Regional Effects of a Place-based Policy – Causal Evidence from Germany
Matthias Brachert, Eva Dettmann, Mirko Titze
Regional Science and Urban Economics,
November
2019
Abstract
The German government provides discretionary investment grants to structurally weak regions in order to reduce regional inequality. We use a regression discontinuity design that exploits an exogenous discrete jump in the probability of regional actors to receive investment grants to identify the causal effects of the policy. We find positive effects of the programme on district-level gross value-added and productivity growth, but no effects on employment and gross wage growth.
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Banking Globalization, Local Lending, and Labor Market Effects: Micro-level Evidence from Brazil
Felix Noth, Matias Ossandon Busch
Abstract
This paper estimates the effect of a foreign funding shock to banks in Brazil after the collapse of Lehman Brothers in September 2008. Our robust results show that bank-specific shocks to Brazilian parent banks negatively affected lending by their individual branches and trigger real economic consequences in Brazilian municipalities: More affected regions face restrictions in aggregated credit and show weaker labor market performance in the aftermath which documents the transmission mechanism of the global financial crisis to local labor markets in emerging countries. The results represent relevant information for regulators concerned with the real effects of cross-border liquidity shocks.
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FDI, Human Capital and Income Convergence — Evidence for European Regions
Björn Jindra, Philipp Marek, Dominik Völlmecke
Economic Systems,
Nr. 2,
2016
Abstract
This study examines income convergence in regional GDP per capita for a sample of 269 regions within the European Union (EU) between 2003 and 2010. We use an endogenous broad capital model based on foreign direct investment (FDI) induced agglomeration economies and human capital. By applying a Markov chain approach to a new dataset that exploits micro-aggregated sub-national FDI statistics, the analysis provides insights into regional income growth dynamics within the EU. Our results indicate a weak process of overall income convergence across EU regions. This does not apply to the dynamics within Central and East European countries (CEECs), where we find indications of a poverty trap. In contrast to FDI, regional human capital seems to be associated with higher income levels. However, we identify a positive interaction of FDI and human capital in their relation with income growth dynamics.
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Identifying the Effects of Place-based Policies – Causal Evidence from Germany
Matthias Brachert, Eva Dettmann, Mirko Titze
IWH Discussion Papers,
Nr. 18,
2016
Abstract
The German government provides discretionary investment grants to structurally weak regions to reduce regional disparities. We use a regression discontinuity design that exploits an exogenous discrete jump in the probability of receiving investment grants to identify the causal effects of the investment grant on regional outcomes. We find positive effects for regional gross value-added and productivity growth, but no effects for employment and gross wage growth.
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Social Capital and Migration Preferences - An Empirical Analysis for the Case of the Reunified Germany
Peter Bönisch, Lutz Schneider, Walter Hyll
Grincoh Working Papers July 2013,
2013
Abstract
We focus on the relevance of different types of social capital on migration intentions in the context of shrinking regions. On the one hand, formal social capital characterised by weak ties without local roots is supposed to drive selectivity and outmigration. On the other hand, informal social capital stressing strong ties to friends, relatives or neighbours might hinder migration. In our regression results we do not find an effect of shrinking regions on mobility intentions. Thus, living in a shrinking area is by itself not a reason to move away or to invest less in social capital. However, if an individual considers to move away she reduces her participation in informal and formal networks. Individuals characterised by strong informal ties, i.e. strong relationships to friends, relatives or neighbours show a significantly lower probability of moving away. And, more qualified types of social capital as participation in local politics or initiatives seem to encourage spatial mobility.
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Finance and Growth in a Bank-Based Economy: Is It Quantity or Quality that Matters?
Michael Koetter, Michael Wedow
Journal of International Money and Finance,
Nr. 8,
2010
Abstract
Most finance–growth studies approximate the size of financial systems rather than the quality of intermediation to explain economic growth differentials. Furthermore, the neglect of systematic differences in cross-country studies could drive the result that finance matters. We suggest a measure of bank’s intermediation quality using bank-specific efficiency estimates and focus on the regions of one economy only: Germany. This quality measure has a significantly positive effect on growth. This result is robust to the exclusion of banks operating in multiple regions, controlling for the proximity of financial markets, when distinguishing different banking sectors active in Germany, and when excluding the structurally weaker East from the sample.
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Why are East Germans not More Mobile? Analyzing the Impact of Social Ties on Regional Migration
Peter Bönisch, Lutz Schneider
Abstract
Individuals’ preferences in transition regions are still shaped by the former communist system. We test this ‘Communism legacy’ hypothesis by examining the impact of acculturation in a communist regime on social network participation and, as a consequence, on preferences for spatial mobility. We focus on the paradigmatic case of East Germany where mobility intentions seem to be substantially weaker than in the western part. Applying an IV ordered probit approach we firstly find that East German people acculturated in a Communist system are more invested in locally bounded informal social capital than West Germans. Secondly, we confirm that membership in such locally bounded social networks reduces the intention to move away. Thirdly, after controlling for the social network effect the mobility gap between East and West substantially reduces. Low spatial mobility of the eastern population, we conclude, is to an important part attributable to a social capital endowment characteristic to post-communist economies.
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