The Impact of Urban Enterprise Zones on Establishments' Location Decisions: Evidence from French Zfus

49 Pages Posted: 28 Sep 2012

See all articles by Thierry Mayer

Thierry Mayer

Sciences Po

Florian Mayneris

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)

Loriane Py

Banque de France

Date Written: August 2012

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 triple difference 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 Classification: R12, R38, R58

Suggested Citation

Mayer, Thierry and Mayneris, Florian and Py, Loriane, The Impact of Urban Enterprise Zones on Establishments' Location Decisions: Evidence from French Zfus (August 2012). CEPR Discussion Paper No. DP9074, Available at SSRN: https://ssrn.com/abstract=2153524

Florian Mayneris

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
B-1348 Louvain-la-Neuve, b-1348
Belgium

Loriane Py

Banque de France ( email )

Paris
France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
2
Abstract Views
1,430
PlumX Metrics