Business Improvement Districts and firm performance: A difference-in-difference approach

Welcome to a higher seminar arranged by the Department of Economics, at the School of Social Sciences, Södertörns University where Oana Mihaesku will present a papper "Business Improvement Districts and firm performance: A difference-in-difference approach."

Business Improvement Districts (BID) have emerged as solutions for the revitalization of urban areas characterized by economic decline. While compulsory participation in BID schemes is internationally pledged as essential for their success, Swedish BIDs are voluntary in nature, which questions their effectiveness.

To elucidate this aspect, we investigate the impacts of BID schemes introduced between 2012 and 2019 in five Swedish cities on the performance of firms both within and outside the boundaries of the designated BID districts. To avoid the possibility that the identification of the effect may be biased due to the non-aleatory choice of BID location we use a difference-in-difference setup and compare the performance of firms in BID districts, after the implementation of the BID schemes, with their performance before implementation and with a series of control districts that are similar to the treatment ones.

The results indicate an average increase of 7% in labour productivity for firms located within the BID districts; this effect is due to the increase in firm revenue (by 11% on average), which is concurrent with small changes in firm employment (3%). The effects on neighbouring areas are not statistically significant."

The seminar will take place via Zoom, please contact Mats Bergman (details below) for link.