Place-based tax exemptions and displacement effects: An evaluation of the Zones Franches Urbaines program

Pauline Givord, Roland Rathelot and Patrick Sillard

Regional Science and Urban Economics, 2013, vol. 43, issue 1, 151-163

Abstract: In this study, we evaluate the impact of the French Zones Franches Urbaines on economic activity. This public-funded place-based program, comparable to US enterprise zones, exempts businesses from taxes for a period of at least five years. For the purpose of this evaluation, we merged several administrative datasets at the company level. This allows us to exhaustively observe business creations and stocks, as well as employment and financial outcomes for companies at specific geographical locations. We focus on the second round of the program, during which treated territories were selected among a pool of deprived areas according to a known set of covariates. The way treatment was assigned makes the conditional independence assumption credible in our case. Overall, we find significant effects on both business creation and employment while the impact on companies that were located in the treated areas before the program is not significant, regardless of the outcome. We also provide evidence of significant negative spillovers of the program on neighboring areas.

Keywords: Enterprise zone; Local employment; Place-based policies; Propensity score matching; Externalities (search for similar items in EconPapers)
JEL-codes: C23 J23 R38 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (108)

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Related works:
Working Paper: Place-based Tax Exemptions and Displacement Effects: An Evaluation of the Zones Franches Urbaines Program (2011)
Working Paper: Place-based tax exemptions and displacement effects: An evaluation of the Zones Franches Urbaines program (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:43:y:2013:i:1:p:151-163

DOI: 10.1016/j.regsciurbeco.2012.06.006

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