The impact of Urban Enterprise Zones on establishment location decisions: Evidence from French ZFUs

Thierry Mayer, Florian Mayneris and Loriane Py

Working papers from Banque de France

Abstract: In this paper, we study the impact of a French enterprise zones program -- the``Zones Franches Urbaines'' (ZFUs) policy-- on establishment location decisions. Our empirical analysis is based on an micro-geographic dataset that provides exhaustive information on the location of establishments in France over the period 2002-2007 at the census block level. Our identification strategy, which combines spatial and time differencing, assesses how the probability that an establishment locates in the ZFU area rather than in the non-ZFU area of a municipality changes after the implementation of the policy. We also implement double difference estimations, using the fact that targeted urban areas have been selected in different waves over time. Finally, we exploit a discontinuity in the eligibility criteria of the policy as an exogenous source of variation to estimate the impact of the treatment. We find that conditioning on locating in a municipality that hosts a ZFU, the policy has a positive and sizable impact on the probability to locate in the ZFU part rather than in the non-ZFU part of municipalities. However the impact is highly heterogeneous across zones, industries and firms. Moreover, we show that the policy mostly generates diversion effects within municipalities.

Keywords: Firm Location; Enterprise zones; Spatial and Time Differencing. (search for similar items in EconPapers)
JEL-codes: R12 R38 R5 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2013
New Economics Papers: this item is included in nep-eur, nep-geo and nep-ure
References: View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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Related works:
Working Paper: The Impact of Urban Enterprise Zones on Establishments' Location Decisions: Evidence from French ZFUs (2012)
Working Paper: The Impact of Urban Enterprise Zones on Establishments' Location Decisions: Evidence from French ZFUs (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:458

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