Regionale Wachstumseffekte der GRW-Förderung?: Eine räumlich-ökonometrische Analyse auf Basis deutscher Arbeitsmarktregionen

Regional Growth Effects of Private Sector Investment Grants in Germany?: A spatial econometric analysis for German labour markets

Björn Alecke, Timo Mitze and Gerhard Untiedt

MPRA Paper from University Library of Munich, Germany

Abstract: This paper provides an analysis of the impact of the German “Joint Task for the Improve-ment of Regional Economic Structures” (GRW) on labour productivity growth of 225 German labour market regions for the period 1994 to 2006. The empirical regression approach builds on a “Barro-type” growth equation, where a special focus is given to the policy instrument as additional right hand side regressor. The results show that for different model specifications the direct effect of the regional policy instrument on labour productivity growth remains statistically significant and positive for almost two thirds of the supported labour markets. In order to check for the robustness of the results we also augment the standard regression approach to the field of spatial econometrics. Here the results for the Spatial Lag model show that we observe a strong positive spatial spillover effect for productivity growth among neighbouring regions. If we additionally include further spatial lags of the right hand side regressors in the growth equation, the estimated coefficients for the resulting Spatial Durbin and Spatial Durbin Error model indicate that there is a negative spillover effect from the GRW policy on neighbouring regions. This effect remains stable, if we add further spatial lags of other explanatory variables. The indirect distorting effect of the GRW programme yields to the result that only for about 45% of supported regions a positive overall effect was found (with an initial income level up to 73% of the non-funded West German labour markets).

Keywords: Investment Grants; Regional Growth; Germany; Spatial Durbin Model (search for similar items in EconPapers)
JEL-codes: C21 R11 R12 R58 (search for similar items in EconPapers)
Date: 2010-05
New Economics Papers: this item is included in nep-ger and nep-ure
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Citations: View citations in EconPapers (1)

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https://mpra.ub.uni-muenchen.de/23975/2/MPRA_paper_23975.pdf revised version (application/pdf)

Related works:
Working Paper: Regionale Wachstumseffekte der GRW-Förderung? Eine räumlich-ökonometrische Analyse auf Basis deutscher Arbeitsmarktregionen (2010)
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