Working Paper: CEPR ID: DP9074
Authors: Thierry Mayer; Florian Mayneris; Loriane Py
Abstract: In this paper, we study the impact of a French enterprise zones program---the ``Zones Franches Urbaines'' (ZFUs) policy---on establishments' location decisions. Our empirical analysis is based on a micro-geographic dataset which provides exhaustive information on the location of establishments in France over the period 2000-2007 at the census block level. We use a difference in difference approach combining spatial and time differencing. We also do tripledifference estimations, using the fact that targeted urban areas have been selected in different waves over time. Finally, we exploit a discontinuity in the eligibility criteria of the policy as an exogenous source of variation to estimate the impact of the treatment. Our results show that the French ZFU policy has a positive and sizable impact on location choices. However, we also find that the policy mostly generates displacement effects, in particular through relocation of firms from the un-treated to the treated part within municipalities. Finally, the impact is shown to be highly heterogeneous across zones, firms and industries. The overall cost of moving establishments within municipalities is relatively high.
Keywords: enterprise zones; firm location
JEL Codes: R12; R38; R58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| ZFU policy (R38) | probability of locating in ZFU area (R32) |
| ZFU policy (R38) | relocation of firms from untreated to treated areas (R30) |
| relocation of firms from untreated to treated areas (R30) | increase in ZFU establishments (R38) |
| ZFU policy (R38) | overall stock or flow of establishments at municipality level (H70) |
| ZFU policy (R38) | heterogeneous impact across zones, firms, and industries (F61) |