Municipal Efficiency Spillovers in France

This paper provides evidence of the role of spillovers in the efficiency of French municipalities. These spillovers are apprehended through four levels of municipal equipment and we investigate municipal efficiency changes both for cities including a certain amount of equipment and for cities located closer to those that host high-rank functions. Based on a database pertaining to French municipalities with over 3,500 inhabitants in 2018, we develop a two-stage approach. In the first stage, we estimate municipal efficiency through a robust order-m approach while in the second stage, we run a truncated bootstrapped regression to disentangle the effect of the distance of an observed municipality to each of the four equipment levels. Our results provide evidence of spillovers where the less-endowed municipalities benefit the most from higher efficiency due to their geographical proximity to larger equipment centers