The effects of supporting local business: Evidence from the UK

Elias Einiö and Henry Overman

Regional Science and Urban Economics, 2020, vol. 83, issue C

Abstract: This paper assesses the effects of a significant place-based intervention that targeted local businesses in deprived areas in the UK. To gain identification, we use data at a fine spatial scale and a regression discontinuity design exploiting the eligibility deprivation rank rule based on a pre-determined deprivation index. We detect no overall effects on employment in treated areas but find a significant displacement of employment from nearby untreated areas, corresponding to around 10% of local employment. The results suggest that indirect displacement effects may substantially weaken the ability of local support programmes targeting the non-tradable sector to reduce economic inequality.

Keywords: Employment; Business support; Local growth; Programme evaluation; Displacement; Regression discontinuity (search for similar items in EconPapers)
JEL-codes: H25 J20 O40 R11 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:83:y:2020:i:c:s016604621930050x

DOI: 10.1016/j.regsciurbeco.2019.103500

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