Effects of business improvement districts on firm performance, property values and urban safety: an empirical study of five small to medium-sized Swedish towns

Business improvement districts (BIDs) have emerged as possible solutions for the revitalisation of declining urban areas. We investigate the effects of a voluntary Swedish BID programme on firm performance, urban safety and property values in five small to medium-sized Swedish towns, and find that it increased labour productivity for incumbent firms within the BID by about 7%, mainly through an increase in revenues. However, the positive effect of the BID programme on firm performance is transitory, decreasing sharply during the third year after implementation and then becoming insignificant. As for urban safety and property values, the results are mostly insignificant.

Automated summary

Business improvement districts (BIDs) have emerged as possible solutions for declining urban areas. A study in five small to medium-sized Swedish towns found that a voluntary BID programme increased labour productivity for incumbent firms within the BID by about 7%, mainly through an increase in revenues. However, the positive effect on firm performance decreased sharply during the third year after implementation and became insignificant. The impact on urban safety and property values was mostly insignificant.