The effects of supporting local business: evidence from the UK

Elias Einiö and Henry Overman

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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; UKRI block grant (search for similar items in EconPapers)
JEL-codes: H25 J20 O40 R11 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2020-07-01
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 (18)

Published in Regional Science and Urban Economics, 1, July, 2020, 83. ISSN: 0166-0462

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http://eprints.lse.ac.uk/102935/ Open access version. (application/pdf)

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Journal Article: The effects of supporting local business: Evidence from the UK (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:102935

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