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Falck, Oliver; Fritsch, Michael; Heblich, Stephan (2010): The Phantom of the Opera: Cultural Amenities, Human Capital, and Regional Economic Growth. Ifo Working Paper, 88
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We analyze the extent to which endogenous cultural amenities affect the spatial equilibriumshare of high-human-capital employees. To overcome endogeneity, we draw on a quasinaturalexperiment in German history and exploit the exogenous spatial distribution ofbaroque opera houses built as a part of rulers� competition for prestigious cultural amenities.Robustness tests confirm our strategy and strengthen the finding that proximity to a baroqueopera house significantly affects the spatial equilibrium share of high-human-capitalemployees. Then, a cross-region growth regression shows that these employees induce localknowledge spillovers and shift a location to a higher growth path.

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