Spatial interaction in local expenditures among Italian municipalities

Massimiliano Ferraresi (), Giuseppe Migali, Leonzio Rizzo () and Francesca Nordi Nordi

No 127328819, Working Papers from Lancaster University Management School, Economics Department

Abstract: We estimate a spatial autoregressive dynamic panel data model, using information on 5,564 Italian municipalities over the period 2001-2011, exploiting their border contiguity as a measure of spatial neighborhood. We find a positive and statistically significant effect of neighboring expenditures on total, capital and current expenditures of a given municipality. We do not find any evidence of yardstick competition when we take account of political effects, while we do find a negative relationship between spatial interaction and the size of the municipality for current expenditure. Thus, we conclude that spillover effects drive the strategic interaction.

Keywords: Local public spending interaction; spillovers; yardstick competition; spatial econometrics; dynamic panel data; system GMM (search for similar items in EconPapers)
JEL-codes: C23 H72 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-geo
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:lan:wpaper:127328819

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