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Effects and Side Effects of Measures to Attract Firms – A Micro-Simulation Study of Firm Location Choice

2012; Taylor & Francis; Volume: 48; Issue: 4 Linguagem: Inglês

10.1080/02513625.2012.776811

2166-8604

Balz R. Bodenmann, Kay W. Axhausen,

Regional Economics and Spatial Analysis

Abstract This paper investigates the effects of different possible options for cantonal and municipal authorities' intent on attracting firms: improvements in transport infrastructure, designation of new building zones, and tax reductions. These options have been tested by simulating the location decisions of existing firms. The parameters for these simulations have been estimated with a discrete choice model using data from the commercial registers of the Canton of St. Gallen and the two Appenzell cantons (Innerrhoden and Ausserrhoden) covering the years 1991 to 2006. The aim of this paper is not only to show the effects, but also to detect potential negative side effects. The simulation results show that tax reductions have an unparalleled large effect, meaning positive effects in the municipalities concerned as well as negative side effects in adjacent municipalities. Generally, effects are more intense in regions with a large number of firms already present. Interestingly, due to large positive effects in a specific region, negative side effects can also be identified over long distances in other regions. Cities and towns are especially affected by these long-distance effects. Notes Record on the current status of building zones (Überbauungsstand). Consistent with the FSO's typology of municipalities, this covers all agglomeration centers with a minimum of 45,000 inhabitants (Schuler et al. Citation2005). Districts with less than 30 firms per year have been merged. This is the median of all companies paying taxes in Switzerland in 2006 (FTA Citation2009). Swiss statistics of firmographics UDEMO revealed that on average firms have 8.71 employees (data from 2004; FSO Citation2009). SustainCity aims to advance the state-of-the-art in the field of micro-simulation of integrated models of land-use and transport, and to develop a prospective modeling platform adapted for the context of Europe (de Palma et al. Citation2010). See also www.sustaincity.eu. SUA integrates LUTI modeling in the climate framework and helps European cities with nextgeneration decision tools to design development paths, e.g., for the 1-ton-CO2-society. See also http://sua.ethz.ch/. FaLC (Facility Location Simulation Tool) is a multi-agent LUTI simulation tool to test transport and spatially relevant scenarios. Additional informationNotes on contributorsBalz R. Bodenmann Balz R. Bodenmann is Senior Assistant in the Traffic Planning Group at the Institute for Transport Planning and Systems (IVT) at ETH Zurich and head of regioConcept AG, Office for Spatial and Traffic Development in Herisau, Switzerland. Kay W. Axhausen Kay W. Axhausen is Professor of Transport Planning at the Institute for Transport Planning and Systems (IVT) at ETH Zurich.