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Place-based Tax Exemptions and Displacement Effects : An Evaluation of the Zones Franches Urbaines Program

Author

Listed:
  • Pauline Givord

    (CREST)

  • Roland Rathelot

    (CREST)

  • Patrick Sillard

    (INSEE)

Abstract
In this study, we evaluate the impact of the French Zones Franches Urbaines on economic activity. This public-funded place-based program, comparable to US enterprise zones, exempts businesses from taxes for a period of at least five years. For the purpose of this evaluation, we merged several administrative datasets at the company level. This allows us to exhaustively observe business creations and stocks, as well as employment and financial outcomes for companies at specific geographical locations. We focus on the second round of the program, during which treated territories were selected among a pool of deprived areas according to a known set of covariates. The way treatment was assigned makes the conditional independence assumption credible in our case. Overall, we find significant effects on both business creation and employment while the impact on companies that were located in the treated areas before the program is not significant, regardless of the outcome. We also provide evidence of significant negative spillovers of the program on neighboring areas.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Pauline Givord & Roland Rathelot & Patrick Sillard, 2011. "Place-based Tax Exemptions and Displacement Effects : An Evaluation of the Zones Franches Urbaines Program," Working Papers 2011-19, Center for Research in Economics and Statistics.
    • Handle: RePEc:crs:wpaper:2011-19
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    More about this item

    Keywords

    enterprise zones; local employment; place-based policies; propensity-score matching; externalities;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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