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The Impact of Urban Enterprise Zones on Establishments' Location Decisions: Evidence from French ZFUs

Thierry Mayer (), Florian Mayneris () and Loriane Py

No 2012019, Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: In this paper, we study the impact of a French enterprise zones program the "Zones Franches Urbaines" (ZFUs) policy on establishments' location decisions. Our empirical analysis is based on a micro-geographic dataset which provides exhaustive information on the location of establishments in France over the period 2000-2007 at the census block level. We use a difference in difference approach combining spatial and time differencing. We also do triple difference estimations, using the fact that targeted urban areas have been selected in different waves over time. Finally, we exploit a discontinuity in the eligibility criteria of the policy as an exogenous source of variation to estimate the impact of the treatment. Our results show that the French ZFU policy has a positive and sizable impact on location choices. However, we also find that the policy mostly generates displacement effects, in particular through relocation of firms from the un-treated to the treated part within municipalities. Finally, the impact is shown to be highly heterogeneous across zones, firms and industries. The overall cost of moving establishments within municipalities is relatively high.

Keywords: firm location; enterprise zones; spatial differencing (search for similar items in EconPapers)
JEL-codes: R12 R38 R58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-geo and nep-ure
Date: 2012-09-28
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Related works:
Working Paper: The impact of Urban Enterprise Zones on establishment location decisions: Evidence from French ZFUs (2013) Downloads
Working Paper: The Impact of Urban Enterprise Zones on Establishments' Location Decisions: Evidence from French ZFUs (2012) Downloads
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