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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...
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Recently, the number of state interventions and of firm subsidies has largely increased. However, the possible outcome of such interventions is rather am-biguous. This paper investigates the impact of firm subsidies granted by Ger-man regional policy. The long experiences made with regional...
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The paper analyses the causal effect of capital subsidies on firms' efficiency and productivity by exploiting the conditions for a local random experiment created by Law 488/92 (henceforth L488), which has been an important policy instrument for reducing territorial disparities in Italy. The...
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welfare argument. Moreover, different tax systems are compared with respect to the size of the subsidy needed for achieving a … adverse effects of subsidies can at least be alleviated. A proportional subsidy to capital increases the overall capital stock …, enabling to draw utility from a wider variety of goods. However, the regional effects are different: compared to the no-subsidy …
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