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Fishing for Growth: The Effect of Regional Aid on Investment in Fisheries [abstract]

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  • Region policy instruments that transfer funds between jurisdictions are popular tools for mitigating spatial economic disparities. Given the regional aspect of fishing activity, these policy tools often benefit fisheries firms. In this paper, I study the effect of the regional policy area in Norway- a geographical area that is, among others, exempt from the general ban on public investment support in the European Economic Area. Fishing firms receive substantial amounts of subsidies for, among others, buying vessels and fishing quotas as part of regional development policies. Insight into the effect of the subsidies is consequently important. The geographical scope of the regional policy area was revised in 2007 and 2014. In both occasions, many fishing firms lost access to public funding as a consequence of the policy change. I exploit these challenges in a difference-in-difference setup to study how regional aid affects fisheries investment. In addition, I construct a comprehensive and novel data set on public subsidies geared toward fisheries investment in Norway. I use this data to measure the effect of public investment support on investments for all fishing firms in Norway in the period 2009-2017. My empirical results indicate a strong effect of public funding on investment behavior among fishing firms. Additionally, I find that a large share of the public subsidies to the fishing industry are used for fishing quotas. My results shed light on how public investment subsidies can influence the distribution of property rights ownership in resource industries. This has relevance for the ongoing debate in fisheries management policy around the trade-offs between social and economic goals.
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  • Vigo, Galicia, Spain
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