Asymmetric yardstick competition and municipal cooperation

Liddo, Giuseppe Di; Giuranno, Michele G.

doi:10.1016/j.econlet.2016.01.015

Cited by 23 publications

(8 citation statements)

References 2 publications

(2 reference statements)

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“…Once this data is available, it may also be possible to test another explanation for the absence of spatial correlation: Accordingly, the lack of spatial correlation may result from the fact that the division of labor between counties is deliberately designed as a form of collusion that prevents inter-county competition. The recent paper by Di Liddo and Giuranno (2016) suggests that this may be the case.…”

Section: Discussionmentioning

confidence: 99%

Vocational schools as an instrument of interregional competition—Empirical evidence from German counties

Bischoff

Hauschildt

2018

Rev Reg Res

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The German apprenticeship system is widely known throughout the world. We analyze expenditures on vocational schools on county level using data from 213 West-German counties between 2001 and 2006. We use spatial econometrics to test for spatial correlation in counties' expenditure on vocational schools but find no evidence that vocational schools serve as instrument in inter-county competition. While the theoretical literature suggests that spending should be higher for apprentices from small firms, we find a negative relationship between the share of apprentices from small firms and the expenditures per pupil. Expenditures are found to increase in the share of Christian Democrats in the county council.

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Section: Discussionmentioning

confidence: 99%

Vocational schools as an instrument of interregional competition—Empirical evidence from German counties

Bischoff

Hauschildt

2018

Rev Reg Res

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“…Let us now turn to the intersecting set of the studies on interlocal competition and on IMC. Di Liddo and Giuranno (2016) provide a theoretical model showing that local governments can impair interlocal competition through IMC. They argue that governments interested in extracting rents make use of IMC because this increases the amount of extractable rents without reducing the probability of reelection.…”

Section: Coordinated Behavior Among Competitorsmentioning

confidence: 99%

“…They argue that governments interested in extracting rents make use of IMC because this increases the amount of extractable rents without reducing the probability of reelection. While rent extraction is unlikely to play a major role in business parks, the main logic of Di Liddo and Giuranno (2016) clearly applies to business parks: Interlocal business parks may serve as a means to take the bite out of intraregional competition for mobile capital.…”

Section: Coordinated Behavior Among Competitorsmentioning

confidence: 99%

Does Interlocal Competition Drive Cooperation in Local Economic Development Policies? Evidence on Interlocal Business Parks in Germany

Bischoff

Melch

Wolfschütz

2020

Urban Affairs Review

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An increasing number of municipalities cooperates in the field of economic development. In this article, we focus on a specific instrument in this field, namely the development of joint business parks. We apply a hazard model to data from West German municipalities between 2000 and 2015. We find interlocal business parks to be more frequent among small municipalities and in urban clusters and other constellations where suitable land is scarce. Our main focus rests on the role of intraregional competition. An analogy building on the literature on international tax coordination supports the hypothesis that interlocal business parks are more likely in regions where intraregional competition is intense. We measure the intensity of competition using local tax rates and find the evidence to be affirmative: The likelihood of interlocal business park formation increases in the intensity of intraregional (tax) competition.

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“…Following Liddo and Giuranno (2016), we model the re-election probability by using a "contest function" (see Hirshleifer 1989). This function defines the probability of winning an election as a function of incumbents' effort; in this case the level of per capita public goods that they provide.…”

Section: The Modelmentioning

confidence: 99%

Fiscal disparity, institutions and asymmetric yardstick competition

Farah

2019

Economics Letters

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. AbstractFiscal disparity leads to a yardstick bias, in that incumbents in fiscally-rich jurisdictions can provide more public goods, extract more rents and yet have a higher probability to be reelected. This study further emphasizes disparity among jurisdictions, not only in terms of fiscal resources but also of costs of rent appropriation. In a setting in which jurisdictions with a higher fiscal capacity have lower costs of rent appropriation whilst those with a lower fiscal capacity have higher costs of rent appropriation, the difference in costs of rent appropriation might moderate the bias caused by the fiscal disparity. JEL-Codes: H71, H72, H77, D72All CIW Discussion Papers can be found here:httpsAbstract Fiscal disparity leads to a yardstick bias, in that incumbents in fiscallyrich jurisdictions can provide more public goods, extract more rents and yet have a higher probability to be reelected. This study further emphasizes disparity among jurisdictions, not only in terms of fiscal resources but also of costs of rent appropriation. In a setting in which jurisdictions with a higher fiscal capacity have lower costs of rent appropriation whilst those with a lower fiscal capacity have higher costs of rent appropriation, the difference in costs of rent appropriation might moderate the bias caused by the fiscal disparity.

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Asymmetric yardstick competition and municipal cooperation

Cited by 23 publications

References 2 publications

Vocational schools as an instrument of interregional competition—Empirical evidence from German counties

Vocational schools as an instrument of interregional competition—Empirical evidence from German counties

Does Interlocal Competition Drive Cooperation in Local Economic Development Policies? Evidence on Interlocal Business Parks in Germany

Fiscal disparity, institutions and asymmetric yardstick competition

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