Local Border Reforms and Economic Activity

Peter Egger, Marko Köthenbürger and Gabriel Loumeau
Authors registered in the RePEc Author Service: Marko Koethenbuerger

No 6738, CESifo Working Paper Series from CESifo

Abstract: In this paper, we study how local border reforms affect economic activity. To do so, we make use of large-scale municipal merger reforms in Germany to assess the effect of local border changes on the distribution of activity in space, an issue that has not been addressed in existing literature. To allow for a comparison of economic activity within unique geographical units over time, we use geo-coded light data as well as local land-use data. Adopting a difference-in-differences approach, we find evidence that municipalities absorbing their merger partners and hosting the new administrative center experience a significant increase in local activity, while the municipalities that are being absorbed and are losing the administrative center experience a decrease in such activity. The difference between the gains in activity from absorbing municipalities and the losses from absorbed ones appears positive. These hitherto undocumented results point to the importance of distance to the administrative center as a determinant of the spatial distribution of economic activity.

Keywords: border effects; centripetal forces; nightlight data; administrative center; municipal mergers (search for similar items in EconPapers)
JEL-codes: H70 R11 R12 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-eur, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Local border reforms and economic activity (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6738

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