scholarly journals Striking a Balance: A National Assessment of Economic Development Incentives

2018 ◽  
Author(s):  
Mary Donegan ◽  
T. William Lester ◽  
Nichola Lowe
Keyword(s):  
Economic Development ◽  
National Assessment ◽  
Economic Development Incentives ◽  
Development Incentives

scholarly journals Striking a Balance: A National Assessment of Economic Development Incentives

2019 ◽  
pp. 107808741988001
Author(s):  
Mary Donegan ◽  
T. William Lester ◽  
Nichola Lowe
Keyword(s):  
Economic Development ◽  
Local Governments ◽  
Job Creation ◽  
Tax Revenue ◽  
Private Firms ◽  
National Assessment ◽  
Economic Development Incentives ◽  
Development Incentives

The use of incentive packages has intensified as local governments compete for new plants and corporate relocations and as private firms increasingly demand a deal. While incentives promise jobs and tax revenue, scholars and practitioners criticize their high cost and limited accountability. Through a comparison of matched establishments, this article explores how governmental incentive-granting strategy impacts incentive performance. We examine the overall impact of incentives and whether incentives granted to smaller firms perform better. Using economic development budget data, we also assess the state’s overall approach to economic development to determine which strategies are prioritized through funding. By showing that incentivized firms fail to create more jobs than matched controls, our analysis casts doubt on claims that “but for” incentives job creation would not occur. Still, our findings suggest that states are smarter in their incentive use when they strike a balance between recruiting industry and supporting “homegrown” businesses and technology.

Targeted state economic development incentives and entrepreneurship

2018 ◽  
Vol 7 (3) ◽  
pp. 235-247 ◽  
Author(s):  
Meg Patrick Tuszynski ◽  
Dean Stansel
Keyword(s):  
Economic Development ◽  
Economic Freedom ◽  
Entrepreneurial Activity ◽  
Data Set ◽  
Content Type ◽  
Incentive Programs ◽  
Economic Development Incentives ◽  
State Economic Development ◽  
Development Incentives ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between state economic development incentives programs and entrepreneurial activity. Design/methodology/approach The authors use panel data and a fixed-effects model to examine the determinants of five measures of entrepreneurial activity. To measure state economic development incentives programs, they use a new and substantially improved data set from Bartik (2017). They also include a measure for economic freedom, the Fraser Institute’s Economic Freedom of North America index. Findings The authors find a robustly negative relationship between development incentives and patent activity. They find some evidence that incentives are negatively associated with small business establishments (<10 employees) as a percentage of total establishments but positively associated with the large business establishment (>500 employees) share. They also find evidence of a positive relationship between economic freedom and both patent activity and net business formation. Research limitations/implications The results imply that economic development incentive programs are unlikely to increase entrepreneurial activity and may decrease it. They also imply increased economic freedom (lower taxes, lower spending, and lower governmental restrictions on labor markets) may increase entrepreneurial activity. Originality/value To the authors’ knowledge, this paper provides the first examination of the relationship between development incentives and entrepreneurial activity that utilizes Bartik (2017), a new vastly improved data set of state economic development incentive programs. The paper also contributes to the literature on the relationship between economic freedom and entrepreneurial activity.

scholarly journals LABOR MARKETS IN TERMS OF ECONOMIC DEVELOPMENT INCENTIVES IN SERBIA

2011 ◽  
Vol XX (X), 2011/2 (2) ◽  
Author(s):  
Branka Radović ◽  
Dragan Radović ◽  
Zoran ÄŒekerevac ◽  
Jugoslav Aničić
Keyword(s):  
Economic Development ◽  
Labor Markets ◽  
Economic Development Incentives ◽  
Development Incentives
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