Does Light Touch Cluster Policy Work? Evaluating the Tech City Programme
ISSN 2042-2695 CEP Discussion Paper No 1648 August 2019 Does Light Touch Cluster Policy Work? Evaluating the Tech City Programme Max Nathan Abstract Despite academic scepticism, cluster policies remain popular with policymakers. This paper evaluates the causal impact of a flagship UK technology cluster programme. I build a simple framework and identify effects using difference-in-differences and synthetic controls on rich microdata. I further test for timing, cross-space variation, scaling and churn channels. The policy grew and densified the cluster, but has had more mixed effects on tech firm productivity. I also find most policy ‘effects’ began before rollout, raising questions about the programme’s added value. Key words: cities, clusters, technology, economic development, synthetic controls JEL Codes: L53; L86; O31; R30; R50 This paper was produced as part of the Centre’s Urban and Spatial Programme. The Centre for Economic Performance is financed by the Economic and Social Research Council. Thanks to Simon Collinson, Anne Green, Neil Lee, Henry Overman, Maria Sanchez-Vidal, Rosa Sanchis-Guarner and Emmanouil Tranos for input, Francesca Arduini for code, Cushman & Wakefield for rents data, and to Martin Dittus, Kat Hanna, Sandra Jones, Natalie Kane, Andy Pratt, Matt Spendlove, Emma Vandore, Georgina Voss, Jess Tyrell, Rob Whitehead and Jonty Wareing for fruitful discussions. Seminar participants at Birmingham, Middlesex, Bath and QMUL and at UEA Düsseldorf 2018 made many useful suggestions. Early parts of this research were funded through a Regional Studies Association Early Career Grant. I am grateful to the RSA for their support. This work includes analysis based on data from the Business Structure Database, produced by the Office for National Statistics (ONS) and supplied by the Secure Data Service at the UK Data Archive.
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