Working Paper

Local Policy Misperceptions and Investment: Experimental Evidence from Firm Decision Makers (with Sebastian Blesse, Florian Buhlmann, and Davud Rostam-Afschar, AEA RCT Registry AEARCTR-0007877), CESifo Working Paper, IZA Discussion Paper under review

We study firm responses to local policies through a survey experiment, providing randomized information on the competitiveness of business tax rates and highway access in their headquarters' municipality. Firms often misperceive local policy competitiveness, especially for tax rates. Investment decisions respond asymmetrically to tax competitiveness. Positive tax rank information reduces investment intentions in neighboring municipalities. Compared to this, negative tax news increase relocation plans. However, most firms receiving bad news plan to continue investing in their headquarters' municipality, indicating home bias. These effects are strongest for mobile firms and corporations. Negative infrastructure news lower location satisfaction but do not influence investment.

Work in Progress

The Demand for Economic Narratives (with Sebastian Blesse, Klaus Gründler, and Henning Hermes, AEA RCT Registry AEARCTR-0013405 ) - Draft available on request

Economic Voting in Electoral Precincts: Evidence from a Granular Cartography of German Cities (with Luisa Dörr, Klaus Gründler, Niklas Potrafke, and Marcel Schlepper) (Coverage on ZEIT Online) (Introducing the LOCEL) (Policy Paper)