Using a natural experiment from Germany, we show that temporary place-based subsidies generate persistent effects on economic density. We identify employment and capital formation as main channels for higher income per square kilometer. As the spatial regression discontinuity design allows us to...

Since the 2009 financial crisis, some national governments have adopted anticyclical tax policies for recovering and economic growth. These policies can be different in terms of what type of tax incentive policy (income, labor, value added) is chosen as well if the strategy is vertical,...

Policy makers at all levels of government believe that one of the key drivers of local economic growth is new businesses. Therefore, governments design policy with the intention of attracting businesses with the hopes that this will create future growth in struggling areas. Over the past few...

We analyse the effect of public Research and Development (R&D) subsidies on private sector innovativeness for a cross-section of East German firms applying different matching estimations, which are primary based on an estimate of a propensity score. To do so, we use a until now unexplored...

A major issue of agriculture in Romania is to achieve the level of profitability of farms which ensures their economic viability. In this respect farms seek profitability of each product. The gross margin is a measure of profitability, which for the field crops is determined by the producer...

This paper examines efficiency in the provision and utilization of a congestible public input in a symmetric tax competition framework with wage rigidities. Despite the fact that also lump-sum taxation is available for regional governments, second-best efficiency emerges only as a special case...

This paper examines the effect of two different soda taxes on consumption behaviour and health of school-aged children in Europe: Hungary imposed a Public Health Product Tax (PHPT) on several unhealthy products in 2011. France introduced solely a soda tax, containing sugar or artificial...

This paper provides a tractable dynamic stochastic general equilibrium framework with endogenous firm creation and destruction and variable technology utilization to analyze the macroeconomic impact of entry costs and fixed cost subsidies. Based on this setup, we revisit empirical and...

This paper examines the effects of unilateral tax policy in the open economy. We construct a general equilibrium trade model with heterogeneous agents allowing for country asymmetries. We find that in contrast to a symmetric country set-up the share of exporting firms is endogenous. We show that...

This paper studies the effects of investment tax credits on firms’ input choices by exploitinga sudden shift in the tax credit rate by firm size for manufacturing firms in Germany in 1999. I find that more generous tax credits lead to a significant increase in both investment and employment,...