Lessons from the French Enterprise Zone Experience ∗ (2012)
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@MISC{Brian12lessonsfrom,
author = {Anthony Brian and Miren Lafourcade and Benoît Schmutz and Urban Severance and Anthony Briant and Miren Lafourcade and Benoît Schmutz},
title = {Lessons from the French Enterprise Zone Experience ∗},
year = {2012}
}
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Abstract
This paper provides empirical support to the intuitive statement that urban geography matters to the success or failure of place-based public policies, using the French enterprise zone program as a case study. According to the few existing evaluations, this program has only had a small positive average impact on firm and job creation rates. In addition, this impact was shown to be strongly heterogeneous across the treated neighborhoods. We investigate here whether the geographical characteristics of these neighborhoods may account for part of these results. We estimate a series of augmented difference-in-differences models in which we interact the treatment indicator with a series of original indicators of spatial isolation, which account for severance, peripherality and disconnection to transportation networks within the urban area. Results indicate that isolation does matter to explain spatial differentials in job creation and firm settlement rates across enterprise zones: only accessible neighborhoods were able to draw benefits from tax breaks and social exemptions. Moreover, whereas the program mostly worked through a displacement effect on pre-existing firms, we show that urban geography was a clear determinant of the decision to create new firms from scratch.
Keyphrases
french enterprise zone experience job creation pre-existing firm spatial isolation displacement effect urban geography tax break empirical support accessible neighborhood social exemption intuitive statement urban area firm settlement rate treatment indicator place-based public policy existing evaluation geographical characteristic new firm french enterprise zone program transportation network job creation rate original indicator augmented difference-in-differences model enterprise zone clear determinant case study urban geography matter small positive average impact spatial differential
