Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/68255
Authors: 
Geys, Benny
Osterloh, Steffen
Year of Publication: 
2012
Series/Report no.: 
WZB Discussion Paper SP II 2012-113
Abstract: 
Studies of spatial policy interdependence in (local) public policies usually concentrate on the relations between jurisdictions within a single analysed region, and disregard possible extra-regional effects. However, the theoretical spatial statistics literature shows that biased estimates might emerge if spatial interactions extend beyond the boundaries of the available data (i.e., the boundary value problem). This paper empirically assesses the practical relevance of this concern by studying German local politicians' assessments of their jurisdictions' main competitors in the struggle to attract firms. We find that location near a border significantly undermines politicians' perception that the fiercest competitive pressure derives from jurisdictions within their own state. This effect sets in about 20km (10.2km) from a national (international) border. These results indicate that nearest municipalities perceive each other as competitors regardless of the state or country where they are located, which has important implications for estimating spatial dependence models.
Subjects: 
government interaction
boundary value problem
border effects
policy interdependence
JEL: 
D24
D60
H71
H72
Document Type: 
Working Paper

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