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Home | Events Archive | Reshaping the Economy? Local Reallocation Effects of Place-Based Policies
Seminar

Reshaping the Economy? Local Reallocation Effects of Place-Based Policies

  • Series
    Spatial Economics Seminar
  • Speaker(s)
    Catherine van der List (University of Essex, United Kingdom)
  • Field
    Spatial Economics
  • Location
    Vrije Universiteit Amsterdam, Main Building, HG-14-A-37
    Amsterdam
  • Date and time

    May 26, 2026
    12:00 - 13:00

Abstract

We study the effects of place-based policies on productivity growth using administrative data on projects co-financed by the EU in Italy linked to firm balance sheet data. We exploit quasi-experimental variation in funding for a large place-based policy stemming from measurement error in regional GDP estimates. Productivity growth decompositions reveal the policy slows growth by inducing reallocation of labor to low-productivity firms. Mechanism analysis using firm-level event studies reveals that negative reallocation effects are caused by high-productivity firms taking up the funds and subsequently becoming more liquidity constrained, leading to slowdowns in employment growth. Joint paper with Sarah Fritz.