Spatial interaction in local expenditures among italian municipalities: evidence from italy 2001-2011

Massimiliano Ferraresi (), Giuseppe Migali, Francesca Nordi () and Leonzio Rizzo ()
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Francesca Nordi: University of Messina & University of Ferrara

No 2016/22, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: We investigate the existence of spatial interaction in spending decisions among Italian municipalities. We estimate a spatial autoregressive dynamic panel data model, using information on 5,564 Italian municipalities over the period 2001-2011, exploiting their border contiguity as a measure of spatial neighborhood. We find a positive effect of neighboring expenditures on total, capital and current expenditures of a given municipality. We do not find any evidence of yardstick competition when we take account of political effects, while we find a negative relationship between spatial interaction and the size of the municipality for current expenditure. Thus, we conclude that spillover effects drive the strategic interaction.

Keywords: Local public spending interaction; spillovers; yardstick competition; spatial econometrics; dynamic panel data; system GMM. (search for similar items in EconPapers)
JEL-codes: C23 H72 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2016
New Economics Papers: this item is included in nep-eur, nep-geo and nep-ure
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ieb:wpaper:doc2016-22

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