The (displacement) effects of spatially targeted enterprise initiatives: evidence from UK LEGI

Einiö, Elias and Overman, Henry G. ORCID: 0000-0002-3525-7629 (2016) The (displacement) effects of spatially targeted enterprise initiatives: evidence from UK LEGI. SERC discussion papers (SERCDP0191). Spatial Economics Research Centre, London, UK.

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Abstract

We investigate the impacts of a significant area-based intervention (LEGI) that aimed to increase employment and entrepreneurial activity in 30 disadvantaged areas across England. We examine the spatial pattern of effects at a fine spatial scale using panel data for small geographic units and a regression discontinuity design that exploits the programme eligibility rule. The results indicate considerable local displacement effects. Employment increases in treated areas close to the treatment area boundary at the cost of significant employment losses in untreated localities just across the boundary. These differences vanish quickly when moving away from the boundary and do not persist after the programme is abolished. These findings support the view that area-based interventions may have considerable negative displacement effects on untreated parts of the economy. This displacement can substantially reduce (or in this case eliminate) any net benefits.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://www.spatialeconomics.ac.uk/
Additional Information:	© 2016 The Authors
Divisions:	Spatial Economics Research Centre Centre for Economic Performance
Subjects:	H Social Sciences > H Social Sciences (General)
JEL classification:	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 R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
Date Deposited:	11 May 2016 16:07
Last Modified:	11 Dec 2024 19:21
Funders:	Economic and Social Research Council, Economic and Social Research Council
URI:	http://eprints.lse.ac.uk/id/eprint/66493

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