Investment subsidies and regional welfare

A dynamic framework and its application to the European regional policy

Bibliographic Data

ID10405862
AuthorsArtem Korzhenevych (0000-0002-3835-9372, Leibniz Institute for Ecological Urban and Regional Development, Dresden, Germany; and Faculty of Business and Economics, Technische Universität Dresden, Dresden, Germany., corresponding author), Johannes Bröcker (0000-0003-1802-8303, Department of Economics, Kiel University, Kiel, Germany; and University of Southern Denmark, Denmark.)
Year2020
Volume54
Issue9
Pages1262-1274
Publication date2020-01-08
Open AccessYes
TypeARTICLE
VenueRegional Studies (JOURNAL)
Journal identifiersISSN: 0034-3404 • E-ISSN: 1360-0591
PublisherRoutledge (PUBLISHER • GB)
DOI10.1080/00343404.2019.1702157
OpenAlexW2999215420
LanguageEN
Citations received2
References cited24

This paper focuses on the question of the effectiveness of subsidies to private and public investment, which are a key component of European regional policy. Given mixed findings from empirical studies, it is worth studying this issue in a simulation model, where the results can be traced back to policy shocks and model assumptions. To this end, the paper employs a multiregional dynamic framework with a perfectly integrated capital market. It is found that investment subsidies are effective and capital market spillover effects are small. The argument is illustrated by numerical simulations of actual investment subsidies to the European Union regions

Argument (complex analysis · Capital (architecture · Economics · European union · International economics · Investment (military · Macroeconomics · Market economy · Political science · Public economics · Regional Policy · Spillover effect · Subsidy · Welfare · Fiscal Policy and Economic Growth · Regional Development and Policy · Regional Economics and Spatial Analysis

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