How much does state aid mitigate employment losses? Local policy effects at a time of economic crisis

ABSTRACT We evaluate the effectiveness of the most extensive experiment of income redistribution, that is, the European Union regional policy, at a time of economic crisis. By exploiting geographical discontinuities in fund eligibility, we analyse comprehensive data on all publicly funded Italian projects at the municipality level. We find a positive impact of localized support to firms with a sizable increase in employment and the number of plants in intensively treated areas. The result is an important policy lesson concerning the effects of place-based policies at a time of a long-lasting recession, such as that engendered by the Covid-19 crisis.

• Publication year

  2018

• Venue

  Regional studies

• Publication date

  2018-04-01

• Fields of study

  Economics, Political Science

• Identifiers
  DOI 10.1080/00343404.2021.2003319
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• Six additional questions about smart specialization: implications for regional innovation policy 4.0

  2020cited by this paper
• Local multipliers at work

  2020cited by this paper
• Does EU regional policy promote local TFP growth? Evidence from the Italian Mezzogiorno

  2020cited by this paper
• The effects of supporting local business: Evidence from the UK

  2020cited by this paper
• Regional inequality in Europe: evidence, theory and policy implications

  2019cited by this paper
• The influence of the local context on the implementation and impact of EU Cohesion Policy

  2019cited by this paper
• Six critical questions about smart specialization

  2019cited by this paper
• Did the Governance of EU Funds Help Italian Regional Labour Markets during the Great Recession?

  2019cited by this paper
• Should Place-Based Jobs Policies Be Used to Help Distressed Communities?

  2019cited by this paper
• Some Causal Effects of an Industrial Policy

  2019influential reference
• Regional disparities in the effect of training on employment

  2019cited by this paper
• Optimal Spatial Policies, Geography, and Sorting*

  2018cited by this paper
• The growth and variability of regional taxes: an application to Italy

  2018cited by this paper
• World inequality report 2018

  2018cited by this paper
• GIS for Credible Identification Strategies in Economics Research

  2018cited by this paper
• Are we spending too much to grow? The case of Structural Funds

  2018cited by this paper
• Including Covariates in the Regression Discontinuity Design

  2018cited by this paper
• Jobs for the Heartland: Place-Based Policies in 21st-Century America

  2018cited by this paper
• Meta-analysis of the impact of European Union Structural Funds on regional growth

  2017cited by this paper
• On the optimal design of place-based policies: A structural evaluation of EU regional transfers

  2017cited by this paper
• Effects of EU Regional Policy: 1989-2013

  2017cited by this paper
• The impact of EU Objective 1 funds on regional development: evidence from the U.K. and the prospect of Brexit

  2017cited by this paper
• Regression Discontinuity Designs

  2017cited by this paper
• An Overview of Geographically Discontinuous Treatment Assignments with an Application to Children’s Health Insurance☆

  2017cited by this paper
• On the effectiveness of EU structural funds during the Great Recession: Estimates from a heterogeneous local average treatment effects framework

  2016cited by this paper
• The geography of the economic crisis in Europe: National macroeconomic conditions, regional structural factors and short-term economic performance

  2016cited by this paper
• The (displacement) effects of spatially targeted enterprise initiatives: evidence from UK LEGI

  2016influential reference
• Estimating Local Fiscal Multipliers

  2016cited by this paper
• From theory to practice in smart specialization strategy: emerging limits and possible future trajectories

  2016cited by this paper
• The Persistent Effects of Place-Based Policy: Evidence from the West-German Zonenrandgebiet

  2015cited by this paper
• Quality of Government and the Returns of Investment: Examining the Impact of Cohesion Expenditure in European Regions

  2015cited by this paper
• Resilience from the micro perspective

  2015cited by this paper
• Place-Based Programs and the Geographic Dispersion of Employment

  2015cited by this paper
• Geographic Boundaries as Regression Discontinuities

  2015cited by this paper
• Natural Experiments Based on Geography

  2015cited by this paper
• The Oxford Handbook of the Italian Economy Since Unification

  2015cited by this paper
• European Structural Funds During the Crisis: Evidence from Southern Italy

  2015cited by this paper
• People, Places and Public Policy: Some Simple Welfare Economics of Local Economic Development Programs

  2014influential reference
• Do subsidies to private capital boost firms' growth? A multiple regression discontinuity design approach

  2014influential reference
• Rationale and Design of EU Cohesion Policies in a Period of Crisis

  2014cited by this paper
• Spatial Discontinuity for the Impact Assessment of the EU Regional Policy. The Case of Italian Objective 1 Regions

  2014cited by this paper
• The effects of unemployment protection on migration in lagging regions

  2014cited by this paper
• Revitalizing regional economies through enterprise support policies: an impact evaluation of multiple instruments

  2014cited by this paper
• Shifting paradigms: People-centred models, active regional development, space-blind policies and place-based approaches

  2014cited by this paper
• NBER WORKING PAPER SERIES PLACE-BASED POLICIES

  2014cited by this paper
• Uncertainty Traps

  2014cited by this paper
• Measuring the effects of European Regional Policy on economic growth: A regression discontinuity approach

  2013cited by this paper
• Policy Rhetoric versus Political Reality: Has the Italian State Given Up on the Mezzogiorno?

  2013cited by this paper
• Local Development that Money Can't Buy: Italy's Contratti Di Programma

  2013cited by this paper
• Assessing the Incidence and Efficiency of a Prominent Place Based Policy

  2013cited by this paper
• The Oxford Handbook of the Italian Economy Since Unification

  2013influential reference
• Absorptive Capacity and the Growth and Investment Effects of Regional Transfers: A Regression Discontinuity Design with Heterogeneous Treatment Effects

  2013cited by this paper
• “Complementarity or conflict? The (in)coherence of cohesion policy”

  2011cited by this paper
• Regression Discontinuity Designs in Economics

  2010cited by this paper
• The Persistent Effects of Peru's Mining Mita

  2010cited by this paper
• Local Labor Markets

  2010cited by this paper
• Local Multipliers

  2010cited by this paper
• Going NUTS : The Effect of EU Structural Funds on Regional Performance ∗

  2009influential reference
• AN AGENDA FOR A REFORMED COHESION POLICY

  2009cited by this paper
• Regional policy under crisis conditions: recent regional policy developments in the EU and Norway

  2009cited by this paper
• Regional Convergence And The Impact Of European Structural Funds Over 1989-1999: A Spatial Econometric Analysis

  2008cited by this paper
• Cities, Agglomeration And Spatial Equilibrium

  2008cited by this paper
• The Economics of Place-Making Policies

  2008cited by this paper
• Identification and Inference for Econometric Models: Essays in Honor of Thomas Rothenberg

  2007cited by this paper
• Evaluation of European Union Cohesion policy: Research questions and policy challenges

  2006cited by this paper
• Local And Regional Development

  2006cited by this paper
• The European Commission issues new guidelines on national regional aid for 2007 – 2013

  2005cited by this paper
• Between Development and Social Policies: The Impact of European Structural Funds in Objective 1 Regions

  2004cited by this paper
• Working paper nr 12: The Impact of regional support on growth and convergence in the European Union

  2002cited by this paper
• Federal Reserve Bank of New York Staff Reports the Role of Macro Effects Unemployment Benefits and Unemployment in the Great Recession: the Role of Macro Effects

  year unknowncited by this paper

• Targeting and Effectiveness of Location‐Based Policies

  2026cites this paper
• Administrative Boundary Effect of Housing Prices in Hangzhou City and Changes Under District Adjustment Policies: Applying a Spatial Discontinuity Regression Method

  2025cites this paper
• The short-run displacement of EU cohesion funds in Italy: has reprogramming a positive impact on regional growth?

  2024cites this paper
• Beyond GDP: assessing the impact of the 2007–13 EU Cohesion Policy

  2024cites this paper
• Can City Deals Improve Economic Performance? Evidence from England

  2023cites this paper
• Looking for a Star: A Comprehensive Evaluation of the EU Cohesion Policy

  2023cites this paper
• Can the EU funds promote regional resilience at time of Covid-19? Insights from the Great Recession

  2020cites this paper
• Some Causal Effects of an Industrial Policy

  2019cites this paper
• The caring hand that cripples? The effects of the European regional policy on local labour market participation in Southern Italy

  2019cites this paper