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The annexation activity of municipalities is studied in a market framework. A sample of 659 municipalities of 25,000 or more population is used to analyze the effects of municipal government structure and annexation statutes on municipal government behavior. Both annexation laws and types of municipal governments are found to be significant determinants of the level of municipal annexation activity. Since some studies indicate that annexation activity affects municipal efficiency, these results have policy implications for state legislators who control the institutions under which municipalities operate.
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Liner et al. (1996) studied this question.
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