[Séminaire Caen] Local Multiplier Effects of Grant Policies in France: A Staggered Difference-in-Differences Analysis with Spatial Spillovers - UFR SEGGAT - MRSH

Abstract:
This study examines the effects of investment grants on employment and value added at the municipal level in France over the period 2016–2022. Specifically, we exploit variation in treatment timing to identify the causal impact of receiving the Rural Equipment Grants (DETR) on employment and value-added dynamics, using the staggered difference-in-differences approach. Our results indicate a positive and statistically significant effect of investment grants on employment in treated municipalities. In contrast, no significant impact is observed on value added. The analysis further reveals substantial heterogeneity in the employment effect depending on the treatment schedule. Moreover, we find that DETR allocation generates positive spillover effects on neighboring municipalities, suggesting spatial externalities. Finally, our estimates indicate a cost per job of approximately €80,984 per year and a relatively low local income multiplier of around 0.11.