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The impact of Urban Enterprise Zones on establishment location decisions and labor market outcomes: evidence from France

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

Sciences Po publications from Sciences Po

Abstract: In this article, we study the impact of a French enterprise zone program—the ‘Zones Franches Urbaines’ (ZFUs) policy—on establishment location decisions and on labor market outcomes. Our main identification strategy, which combines spatial and time differencing, shows that conditional on locating in a municipality that hosts a ZFU, the policy has a positive and sizable impact on the probability to locate in the ZFU part rather than in the non-ZFU part of municipalities. However, the impact is highly heterogeneous across zones, industries and firms. We also show that this positive effect is entirely due to within-municipality diversion effects. Regarding labor market outcomes, the policy has a positive effect on employment, especially for low-wage workers. As for wages, the effect is null for low-wage workers, and negative for high-wage ones.

Keywords: Firm location; Enterprise zones; Employment; Wages; Spatial differencing (search for similar items in EconPapers)
JEL-codes: R12 R38 R58 (search for similar items in EconPapers)
Date: 2017-07
New Economics Papers: this item is included in nep-geo and nep-ure
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Citations: View citations in EconPapers (11) Track citations by RSS feed

Published in Journal of Economic Geography, 2017, vol. 17, pp.709-752

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Journal Article: The impact of Urban Enterprise Zones on establishment location decisions and labor market outcomes: evidence from France (2017) Downloads
Working Paper: The impact of urban enterprise zones on establishment location decisions and labor market outcomes: evidence from France (2017)
Working Paper: The impact of Urban Enterprise Zones on establishment location decisions and labor market outcomes: evidence from France (2017) Downloads
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