The persistent effects of place - based policy :

We show that temporary place-based subsidies generate persistent effects on economic density. As our design allows us to control for agglomeration economies, we attribute an important role to policy-induced locational advantage (e.g. capital structures) in explaining persistent spatial patterns of economic activity. With regard to distributional implications, we show that subsidies have capitalized in land rents, so pre-treatment land owners have benefitted predominantly from the program.