IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa05p539.html
   My bibliography  Save this paper

Fiscal Design and the Location of Economic Activity

Author

Listed:
  • Ulrike Stierle-von Schütz

Abstract

In the process of economic integration regional production structures are about to change. Several studies analysed already trends of regional specialization in the European Union and attempted to figure out determinants of observed changes. In this context, up to date the role of the public sector and especially the impact of different fiscal designs as determinants of the change in production structures have been left aside. Advantages and shortcomings of decentralized government organization have been largely discussed theoretically within the last decades. Several empirical studies attempted to examine the impact of decentralization on national performance, e.g. economic growth and fiscal stability. This paper aims at linking these two subjects and analyzes the empirical relationship between regional specialization and fiscal decentralization for a panel of 15 Member States of the European Union, controlling for regional and other institutional determinants. The analysis shows that rather autonomous regions tend to diverse their production structure in order to insure against adverse supply shocks.

Suggested Citation

  • Ulrike Stierle-von Schütz, 2005. "Fiscal Design and the Location of Economic Activity," ERSA conference papers ersa05p539, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa05p539
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa05/papers/539.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fredrik Andersson & Rikard Forslid, 2003. "Tax Competition and Economic Geography," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(2), pages 279-303, April.
    2. Marius BRÜLHART & Federico TRIONFETTI, 2000. "Public Expenditure and International Specialisation," Cahiers de Recherches Economiques du Département d'économie 00.23, Université de Lausanne, Faculté des HEC, Département d’économie.
    3. Krieger-Boden, Christiane, 1999. "Nationale und regionale Spezialisierungsmuster im europäischen Integrationsprozeß," Open Access Publications from Kiel Institute for the World Economy 2294, Kiel Institute for the World Economy (IfW Kiel).
    4. Combes, Pierre-Philippe & Lafourcade, Miren, 2001. "Transport Cost Decline and Regional Inequalities: Evidence from France," CEPR Discussion Papers 2894, C.E.P.R. Discussion Papers.
    5. Mary Amiti, 1999. "Specialization patterns in Europe," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(4), pages 573-593, December.
    6. Steven Brakman & Harry Garretsen & Marc Schramm, 2004. "The strategic bombing of German cities during World War II and its impact on city growth," Journal of Economic Geography, Oxford University Press, vol. 4(2), pages 201-218, April.
    7. Donald R. Davis & David E. Weinstein, 2008. "A Search For Multiple Equilibria In Urban Industrial Structure," Journal of Regional Science, Wiley Blackwell, vol. 48(1), pages 29-65, February.
    8. Lars P. Feld, 2008. "Fiscal Federalism and Economic Growth in OECD Countries," Chapters, in: Andreas Bergh & Rolf Höijer (ed.), Institutional Competition, chapter 9, Edward Elgar Publishing.
    9. Stegarescu, Dan, 2004. "Public Sector Decentralization: Measurement Concepts and Recent International Trends," ZEW Discussion Papers 04-74, ZEW - Leibniz Centre for European Economic Research.
    10. Sebnem Kalemli-Ozcan & Bent E. Sørensen & Oved Yosha, 2003. "Risk Sharing and Industrial Specialization: Regional and International Evidence," American Economic Review, American Economic Association, vol. 93(3), pages 903-918, June.
    11. Ulrich Thießen, 2003. "Fiscal Decentralisation and Economic Growth in High-Income OECD Countries," Fiscal Studies, Institute for Fiscal Studies, vol. 24(3), pages 237-274, September.
    12. Baldwin, Richard E. & Krugman, Paul, 2004. "Agglomeration, integration and tax harmonisation," European Economic Review, Elsevier, vol. 48(1), pages 1-23, February.
    13. Donald R. Davis & David E. Weinstein, 2002. "Bones, Bombs, and Break Points: The Geography of Economic Activity," American Economic Review, American Economic Association, vol. 92(5), pages 1269-1289, December.
    14. Combes, Pierre-Philippe & Overman, Henry G., 2004. "The spatial distribution of economic activities in the European Union," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 64, pages 2845-2909, Elsevier.
    15. Ebel, Robert D. & Yilmaz, Serdar, 2002. "On the measurement and impact of fiscal decentralization," Policy Research Working Paper Series 2809, The World Bank.
    16. Stirböck, Claudia, 2004. "Comparing Investment and Employment Specialisation Patterns of EU Regions," ZEW Discussion Papers 04-43, ZEW - Leibniz Centre for European Economic Research.
    17. Karl Aiginger & Wolfgang Leitner, 2002. "Regional concentration in the United States and Europe: Who follows whom?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(4), pages 652-679, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cornelius Bähr & Ulrike Stierle‐von Schütz & Matthias Wrede, 2007. "Dezentralisierung in den EU‐Staaten und räumliche Verteilung wirtschaftlicher Aktivitäten," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(2), pages 110-129, March.
    2. Jürgen Von Hagen, 2007. "Institutionelle Gestaltung föderaler Systeme: Theorie und Empirie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(2), pages 109-109, March.
    3. Fabien Candau, 2008. "Entrepreneurs' Location Choice And Public Policies: A Survey Of The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 909-952, December.
    4. Fabien Candau, 2008. "Good governance, trade and agglomeration," Papers in Regional Science, Wiley Blackwell, vol. 87(4), pages 483-504, November.
    5. Head, Keith & Mayer, Thierry, 2004. "The empirics of agglomeration and trade," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 59, pages 2609-2669, Elsevier.
    6. Christian Leßmann, 2006. "Fiscal Decentralization and Regional Disparity: A Panel Data Approach for OECD Countries," ifo Working Paper Series 25, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    7. Rikard Forslid & Toshihiro Okubo, 2021. "Agglomeration of low-productive entrepreneurs to large regions: a simple model," Spatial Economic Analysis, Taylor & Francis Journals, vol. 16(4), pages 471-486, October.
    8. Brulhart, Marius & Traeger, Rolf, 2005. "An account of geographic concentration patterns in Europe," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 597-624, November.
    9. Stephen J. Redding, 2013. "Economic Geography: A Review of the Theoretical and Empirical Literature," Palgrave Macmillan Books, in: Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), Palgrave Handbook of International Trade, chapter 16, pages 497-531, Palgrave Macmillan.
    10. Forslid, Rikard & Okubo, Toshihiro, 2018. "Trade Liberalization and the Agglomeration of Heterogeneous Entrepreneurs," CEPR Discussion Papers 13381, C.E.P.R. Discussion Papers.
    11. Candau, Fabien, 2006. "The Spatial and Public Economics of Regions, a Theoretical and Empirical Survey," MPRA Paper 1153, University Library of Munich, Germany.
    12. Bosker, Maarten & Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2008. "A century of shocks: The evolution of the German city size distribution 1925-1999," Regional Science and Urban Economics, Elsevier, vol. 38(4), pages 330-347, July.
    13. Stephen J. Redding, 2010. "The Empirics Of New Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 297-311, February.
    14. Gabriel M. Ahlfeldt & Stephen J. Redding & Daniel M. Sturm & Nikolaus Wolf, 2015. "The Economics of Density: Evidence From the Berlin Wall," Econometrica, Econometric Society, vol. 83, pages 2127-2189, November.
    15. Stirböck, Claudia, 2001. "Agglomeration tendencies in EU regions: where does capital go?," ZEW Discussion Papers 01-28, ZEW - Leibniz Centre for European Economic Research.
    16. Jens Suedekum, 2006. "Concentration and Specialization Trends in Germany since Re-unification," Regional Studies, Taylor & Francis Journals, vol. 40(8), pages 861-873.
    17. Christian Ochsner, 2017. "Dismantled once, diverged forever? A quasi-natural experiment of Red Army misdeeds in post-WWII Europe," ifo Working Paper Series 240, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    18. Federico Trionfetti, 2015. "Public Debt and Economic Geography," International Regional Science Review, , vol. 38(1), pages 92-113, January.
    19. Thisse, Jacques-François & Proost, Stef, 2015. "Skilled Cities, Regional Disparities, and Efficient Transport: The state of the art and a research agenda," CEPR Discussion Papers 10790, C.E.P.R. Discussion Papers.
    20. Testa, Patrick A., 2021. "Shocks and the spatial distribution of economic activity: The role of institutions," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 791-810.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa05p539. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.