Fiscal decentralization and spillover effects of local government public spending: the case of Italy. Regional Studies. This paper investigates the presence of spatial interdependencies in the regional public expenditure decision process and the impact of fiscal decentralization on its determinants. The analysis refers to the constitutional reform concluded in Italy in 2001 that redefined the legislative powers of the regions and their sectoral competence. The results highlight the opportunistic behaviour of regional governments in sectors where they can benefit from neighbours’ public expenditure spillovers. Other findings comprise the presence of congestion and mobility effects, a shift in demand to the private sector, except for education, and the mobility of individuals towards richer regions
This study analyses the determinants of foreign direct investments in Hungarian counties in the period 2001–2011. Unlike previous studies, the role of local public policies was also tested. To this end, local government social welfare expenditures and special economic regulations are considered in the econometric model. The results highlight the importance of local government interventions in creating a favourable environment to attract FDI to Hungarian counties. Furthermore, market size, labour skills and agglomeration economies significantly influence FDI location choices
This study investigates the 'club convergence' hypothesis applying the stochastic notion of convergence to groups of European regions. In order to avoid the group selection bias problem, the innovative regression tree technique was applied to select endogenously the most important variables in achieving the best identification of groups on the base of per capita income and productive specialization. Tests on stochastic convergence in each group evidences a strong convergence among the wealthiest regions of the European Union and a trend of weak convergence among the remaining groups, confirming Baumol's hypothesis of convergence.
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