The effects of supporting local business: evidence from the UK

Einiö, Elias and Overman, Henry G. ORCID: 0000-0002-3525-7629 (2020) The effects of supporting local business: evidence from the UK. Regional Science and Urban Economics, 83. ISSN 0166-0462

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Abstract

This paper assesses the effects of a significant place-based intervention that targeted local businesses in deprived areas in the UK. To gain identification, we use data at a fine spatial scale and a regression discontinuity design exploiting the eligibility deprivation rank rule based on a pre-determined deprivation index. We detect no overall effects on employment in treated areas but find a significant displacement of employment from nearby untreated areas, corresponding to around 10% of local employment. The results suggest that indirect displacement effects may substantially weaken the ability of local support programmes targeting the non-tradable sector to reduce economic inequality.

Item Type:	Article
Official URL:	https://www.journals.elsevier.com/regional-science...
Additional Information:	© 2020 The Authors
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HD Industries. Land use. Labor
JEL classification:	R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H25 - Business Taxes and Subsidies J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J20 - General O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General
Date Deposited:	17 Dec 2019 13:15
Last Modified:	12 Dec 2024 02:01
URI:	http://eprints.lse.ac.uk/id/eprint/102935

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