Market Differentiation and the Adoption of Economic Development Strategies: Explaining Policy Adoption in Metropolitan Areas

Michael Ryan Overton
Additional contact information
Michael Ryan Overton: University of North Texas, Center for Public Management

The Review of Regional Studies, 2018, vol. 48, issue 3, 299-322

Abstract: Local government competition for private business investment is a central concern in polycentric governance. Previous research argues that competition for business investment is intense and ubiquitous across local governments (Peterson, 1981; Rubin, 1988). However, local government managers adopt policy and economic development strategies in the context of the strategies adopted by neighboring local governments. Do cities, knowing the economic development strategies of their neighboring cities, pursue similar types of businesses? Or do they strategically target different types of businesses to avoid the negative consequences of competition? Hypotheses are tested by applying product differentiation theory to policy adoption in metropolitan areas using spatial regression analysis on a sample of 2,299 cities. Results indicate that cities pursue similar development strategies as neighboring cities, but will implement increasingly differentiated strategies as population heterogeneity and political and bureaucratic incentives increase. Furthermore, this study finds that a city’s reliance on the sales tax and the costs of competing for business location impact the type of development strategy used by a city.

Keywords: local government competition; policy adoption; agglomeration economies (search for similar items in EconPapers)
JEL-codes: H77 R51 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://journal.srsa.org/ojs/index.php/RRS/article/view/939 To View On Journal Page
http://journal.srsa.org/ojs/index.php/RRS/article/view/939/877 To Download Article

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rre:publsh:v48:y:2018:i:3:p:299-322

Access Statistics for this article

The Review of Regional Studies is currently edited by Tammy Leonard & Lei Zhang and Lei Zhang

More articles in The Review of Regional Studies from Southern Regional Science Association Contact information at EDIRC.
Bibliographic data for series maintained by Tammy Leonard & Lei Zhang ().