Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/235103 
Year of Publication: 
2020
Series/Report no.: 
KOF Working Papers No. 489
Publisher: 
ETH Zurich, KOF Swiss Economic Institute, Zurich
Abstract: 
I study how and why economic activity varies around regional borders. Spatial quasi-experimental variation around French departmental borders reveals discontinuous commuting and residential patterns. To tackle the endogenous border placement problem, I exploit a geometric border design proposed during the French Revolution. I then calibrate a spatial quantifiable general equilibrium framework to structurally match the quasi-experimental estimates. The commuting and residential discontinuities are well explained by a 7km bilateral distance penalty when crossing regional borders, which is the consequence of the decentralized planning and development of local transport networks. Policy simulation shows that integrating local transport networks leads to a 11.7% average growth in real per capita residential income.
Subjects: 
Border
Commuting
Discontinuity
Transport network
Decentralization
JEL: 
R12
R42
O18
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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