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Borders as boundaries to fiscal policy interactions? An empirical analysis of politicians' opinions on rivals in the competition for firms
[working paper]
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Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Abstract Studies of spatial policy interdependence in (local) public policies usually concentrate on the relations between jurisdictions within a single analysed region, and disregard possible extra-regional effects. However, the theoretical spatial statistics literature shows that biased estimates might eme... view more
Studies of spatial policy interdependence in (local) public policies usually concentrate on the relations between jurisdictions within a single analysed region, and disregard possible extra-regional effects. However, the theoretical spatial statistics literature shows that biased estimates might emerge if spatial interactions extend beyond the boundaries of the available data (i.e., the boundary value problem). This paper empirically assesses the practical relevance of this concern by studying German local politicians' assessments of their jurisdictions' main competitors in the struggle to attract firms. We find that location near a border significantly undermines politicians' perception that the fiercest competitive pressure derives from jurisdictions within their own state. This effect sets in about 20km (10.2km) from a national (international) border. These results indicate that nearest municipalities perceive each other as competitors regardless of the state or country where they are located, which has important implications for estimating spatial dependence models. (author's abstract)... view less
Keywords
trade tax; Bundesland; Baden-Württemberg; Federal Republic of Germany; competition; border region; enterprise; fiscal policy; choice of location
Classification
Area Development Planning, Regional Research
Economic Policy
Free Keywords
boundary value problem
Document language
English
Publication Year
2012
City
Berlin
Page/Pages
38 p.
Series
Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Schwerpunkt Märkte und Politik, Forschungsprofessur und Projekt The Future of Fiscal Federalism, SP II 2012-113
Handle
https://hdl.handle.net/10419/68255
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications