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Ajay Agrawal, Iain Cockburn, Alberto Galasso, Alexander Oettl In light of rising regional within-country inequality around the world (Moretti 2008, Ehrlich and Overman 2020, Rosés and Wolf 2018), many policymakers have discussed efficient and effective measures to counter the increasing spatial disparities. In this regard, place-based policies, which directly subsidise regions that are economically lagging behind, are a prominent instrument in policymakers’ toolkits (Glaeser and Gottlieb 2008). Between 2014 and 2020, the EU spent more than €350 billion – about a third of its budget – on regional policies (Ehrlich and Overman 2020). The US currently devotes about $60 billion to place-based policies – mostly through business tax incentives (Bartik 2020, Slattery and Zidar 2020). A recent wave of studies has demonstrated that place-based policies unfold positive economic effects on targeted regions (Kline and Moretti 2014, Neumark and Simpson 2015, Ku et al. 2020). But it i

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