Indecent Proposals: Estimating the Impact of Regional State Aid through EU Guideline Compliance (with Jo Reynaerts, forthcoming in Regional Science and Urban Economics)

ABSTRACT: This paper estimates the causal effects of Flanders’ main industrial policy programme, aiming to support economic development in lagging municipalities. The identification strategy exploits a State Aid reform which required Member States to propose a designation methodology and a selection of eligible municipalities in accordance with the new guidelines. While the proposed designation indicators allow us to account for selection on observables, further compliance with State Aid guidelines make causal inference possible. Additionally, we exploit exogenous intervention in the selection of municipalities, as the first regional aid map was not accepted by the European Commission. We find strong evidence for a 10% effect on manufacturing employment, largely explained by jobs safeguarded in declining industries.

Regional Competitiveness and High-Growth Firms in the EU: the Creativity Premium (with Leo Sleuwaegen, forthcoming in Applied Economics)

ABSTRACT: The finding that the economic performance of regions is driven by a small set of productive firms calls for a granular analysis of regional growth and competitiveness. Among the productive firms, a significant contribution is made by so-called high-growth firms (HGFs), which also account for the bulk of new jobs created in the region. In this paper, we examine the variation in the incidence of HGFs across a wide set of EU regions in relation to the regional entrepreneurial ecosystem. Looking through the lens of the experimentally oriented economy, we conceptualize the essential role that the creative class plays in the formation of collaborative innovation blocs from which dynamic entrepreneurship and high-growth firms emerge. We present original evidence showing that, for the human capital present in the region, employment in creative occupations has the strongest impact on the occurrence of high-growth firms. Our evidence also points to the stimulating role played by the quality of market-supporting institutions, agglomeration, and infrastructure.

Working Papers

The Impact of Local Property Taxation on Firm Growth and Location: Evidence from Flanders (NEW VERSION NOV 2019)

ABSTRACT: Determinants of firm growth and location patterns are many and often unobserved. The influence of local taxation is likely to be dominated by other factors, whose variation over time and space may well be correlated with local tax setting behaviour. In this paper, we set out from this observation to causally identify the effect of large property tax shocks on firm growth and location decisions. By zooming in on firms and entrants clustered near municipal borders, local pull and push factors are accounted for through spatial differencing. This identification approach is enhanced by instrumental variables and by taking into account previously overlooked place-based policy and local public investment, shown to otherwise bias the property tax effect. Nevertheless, the results provide strong evidence for a negative impact of property taxation on firm growth and entry.

Work in Progress

  • Identifying Local Fiscal Interaction: Evidence from a Finance Reform in Flanders (joint with Lorenz Fischer)
  • The Role of Fiscal Interest in Local Policy: Evidence from a Tax Base Reform (joint with Willem Sas)

General Audience

  • Ramboer, S. and Reynaerts, J. (2018). Onroerende voorheffing remt groei bedrijven af. VIVES Briefing 2018/03. Leuven: Research Centre for Regional Economics.
  • Ramboer, S. and Reynaerts, J. (2017). De invloed van de onroerende voorheffing op ondernemingsgroei. STORE 2017/12. Leuven: Policy Research Centre Economics and Entrepreneurship.
  • Ramboer, S. and Reynaerts, J. (2017).  Staatshervorming goed voor Vlaamse werkloosheid? VIVES Briefing 2017/02. Leuven: Research Centre for Regional Economics.
  • Ramboer, S. and Sleuwaegen, L. (2016). Regionale determinanten van hoge-groei-ondernemingen.  VIVES Briefing 2016/03. Leuven: Research Centre for Regional Economics.
  • Ramboer, S. and Sleuwaegen, L. (2015). Het belang van de strategische context voor de ontwikkeling van Hoge Groei Ondernemingen.  STORE 2015/12. Leuven: Policy Research Centre Economics and Entrepreneurship.
  • Ramboer, S. (2015). Fiscal interest in Flanders: The impact of tax autonomy on productive expenditureDocumentatieblad, 75(1), pp. 75-122.