Munich Personal RePEc Archive

Regional policy and investment behaviour: The case of Greece, 1971-1982

Louri, Helen (1989): Regional policy and investment behaviour: The case of Greece, 1971-1982. Published in: Regional Studies , Vol. 23, No. 3 : pp. 231-239.

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Abstract

The present paper reports an attempt to evaluate the relative effects of regional policy on investment in Greek manufacturing industry during 1971-82. A generalized neoclassical model of investment behaviour is used allowing for separate estimates of the effects of different policy instruments. Both regional investment incentives and infrastructure expenditures were found to exert a significant influence on capital formation. Simulations with alternative policy cornbinations showed that if incentives were accompanied by more equally distributed infrastructure expenditures the cost of the policy would be the same but its effects would be enhanced: an equal amount of investment would be created with a fairer regional distribution.

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