Can local government spending spur entrepreneurial activity? To answer this question, we study a setting where, around multiple pre-determined and non-manipulable thresholds, municipalities with lower tax revenues receive direct and different monetary grants from the national budget. Employing a fuzzy regression discontinuity design, we find a positive impact of fiscal transfers on the number of firms, especially sole proprietorships and small firms. The impact is stronger in municipalities where the opposition is more involved in the legislative process or more parties are represented in the municipal council.

中文翻译：

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财政转移支付、地方政府和创业

地方政府支出能否刺激创业活动？为了回答这个问题，我们研究了一种环境，在多个预先确定的和不可操纵的阈值周围，税收收入较低的城市从国家预算中获得直接和不同的货币补助。采用模糊回归断点设计，我们发现财政转移对企业数量，特别是独资企业和小企业的数量产生积极影响。在反对派更多地参与立法过程或在市议会中有更多政党代表的城市，这种影响更大。