Politicians' opinions on rivals in the competition for firms: An empirical analysis of reference points near a border

Benny Geys and Steffen Osterloh ()

No 11-020, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Studies of spatial policy interdependence in (local) public policies usually concentrate on the relations between jurisdictions within a single analysed region, and disregard possible extra-regional effects. This paper evaluates the validity of such restriction by studying German local politicians' assessments of their jurisdictions' main competitors in the struggle to attract firms. We find that location near a border significantly undermines politicians' perception that the fiercest competitive pressure derives from jurisdictions within their own state. This effect sets in about 20km (12.5km) from a national (international) border. We also confirm that intranational borders are perceived as much less constraining for firms than international ones, even in a highly integrated area such as the European Union. Overall, these results indicate that nearest municipalities perceive each other as competitors regardless of the state or country where they are located. The practical implications of these findings for future studies on spatial policy interdependence are discussed.

Keywords: government interaction; competition; border effects; policy interdependence (search for similar items in EconPapers)
JEL-codes: D24 D60 H71 H72 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-geo and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:11020

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