Does Regional Redistribution Spur Growth

  title={Does Regional Redistribution Spur Growth},
  author={M. Koetter and Michael Wedow},
After the German reunification, interregional subsidies accounted for approximately four percent of gross fixed capital investment in the new federal states. We show that between 1992 and 2005 infrastructure and (small) business aid had a negative net impact on regional economic growth. This suggests that regional redistribution was ineffective, potentially due to a lack of spatial concentration to create growth poles.