Do local tax incentives affect economic growth? What mean impacts miss in the analysis of enterprise zone policies

Daniele Bondonio; Robert T. Greenbaum

doi:10.1016/j.regsciurbeco.2006.08.002

Do local tax incentives affect economic growth? What mean impacts miss in the analysis of enterprise zone policies

Daniele Bondonio
, Robert T. Greenbaum

Department of Law, Political, Social and Economic Sciences

Research output: Contribution to journal › Article › peer-review

Abstract

This paper exploits the exogenous variation of U.S. state enterprise zone policies to estimate the impact of geographically-targeted tax incentives on a number of dimensions of local economic growth. The econometric analysis uses establishment-level data to sort out growth outcomes into gross flows separately accounted for by new, existing, and vanishing establishments in the target areas. Results offer empirical evidence with strong external validity to support specific policy recommendations and show that the impacts of the incentives have more complex dynamics than those revealed by the null mean impact estimates obtained from analyzing net growth outcomes.

Original language	English
Pages (from-to)	121-136
Number of pages	16
Journal	Regional Science and Urban Economics
Volume	37
Issue number	1
DOIs	https://doi.org/10.1016/j.regsciurbeco.2006.08.002
Publication status	Published - Jan 2007

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth

Keywords

Enterprise zones
Gross flows
Local economic growth
Program evaluation
Tax incentives

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10.1016/j.regsciurbeco.2006.08.002

Cite this

@article{3b7c5c698c73496eb4777be242b8c178,

title = "Do local tax incentives affect economic growth? What mean impacts miss in the analysis of enterprise zone policies",

abstract = "This paper exploits the exogenous variation of U.S. state enterprise zone policies to estimate the impact of geographically-targeted tax incentives on a number of dimensions of local economic growth. The econometric analysis uses establishment-level data to sort out growth outcomes into gross flows separately accounted for by new, existing, and vanishing establishments in the target areas. Results offer empirical evidence with strong external validity to support specific policy recommendations and show that the impacts of the incentives have more complex dynamics than those revealed by the null mean impact estimates obtained from analyzing net growth outcomes.",

keywords = "Enterprise zones, Gross flows, Local economic growth, Program evaluation, Tax incentives",

author = "Daniele Bondonio and Greenbaum, \{Robert T.\}",

note = "Funding Information: The research in this paper was conducted using Census Bureau data at the Carnegie Mellon Research Data Center. Results and statistics contained in the paper have been screened to ensure that no confidential data are revealed. Bondonio acknowledges funding support from the U.S. Department of Housing and Urban Development's Doctoral Dissertation Research Grant and from the National Science Foundation Geography and Regional Science Program's Doctoral Dissertation Research Improvement Grant. We sincerely thank Peter Fisher and Alan Peters for providing access to their TAIM model used to estimate the monetary value of enterprise zone incentives. We are also grateful to John Engberg, Daniel Nagin, Martin Gaynor, Richard Arnott, two anonymous referees and seminar participants at Carnegie Mellon University for comments and advice. The results and conclusions expressed are those of the authors alone and do not necessarily reflect the views of the U.S. Government, the National Science Foundation, or the Bureau of the Census.",

year = "2007",

month = jan,

doi = "10.1016/j.regsciurbeco.2006.08.002",

language = "English",

volume = "37",

pages = "121--136",

journal = "Regional Science and Urban Economics",

issn = "0166-0462",

publisher = "Elsevier BV",

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TY - JOUR

T1 - Do local tax incentives affect economic growth? What mean impacts miss in the analysis of enterprise zone policies

AU - Bondonio, Daniele

AU - Greenbaum, Robert T.

N1 - Funding Information: The research in this paper was conducted using Census Bureau data at the Carnegie Mellon Research Data Center. Results and statistics contained in the paper have been screened to ensure that no confidential data are revealed. Bondonio acknowledges funding support from the U.S. Department of Housing and Urban Development's Doctoral Dissertation Research Grant and from the National Science Foundation Geography and Regional Science Program's Doctoral Dissertation Research Improvement Grant. We sincerely thank Peter Fisher and Alan Peters for providing access to their TAIM model used to estimate the monetary value of enterprise zone incentives. We are also grateful to John Engberg, Daniel Nagin, Martin Gaynor, Richard Arnott, two anonymous referees and seminar participants at Carnegie Mellon University for comments and advice. The results and conclusions expressed are those of the authors alone and do not necessarily reflect the views of the U.S. Government, the National Science Foundation, or the Bureau of the Census.

PY - 2007/1

Y1 - 2007/1

N2 - This paper exploits the exogenous variation of U.S. state enterprise zone policies to estimate the impact of geographically-targeted tax incentives on a number of dimensions of local economic growth. The econometric analysis uses establishment-level data to sort out growth outcomes into gross flows separately accounted for by new, existing, and vanishing establishments in the target areas. Results offer empirical evidence with strong external validity to support specific policy recommendations and show that the impacts of the incentives have more complex dynamics than those revealed by the null mean impact estimates obtained from analyzing net growth outcomes.

AB - This paper exploits the exogenous variation of U.S. state enterprise zone policies to estimate the impact of geographically-targeted tax incentives on a number of dimensions of local economic growth. The econometric analysis uses establishment-level data to sort out growth outcomes into gross flows separately accounted for by new, existing, and vanishing establishments in the target areas. Results offer empirical evidence with strong external validity to support specific policy recommendations and show that the impacts of the incentives have more complex dynamics than those revealed by the null mean impact estimates obtained from analyzing net growth outcomes.

KW - Enterprise zones

KW - Gross flows

KW - Local economic growth

KW - Program evaluation

KW - Tax incentives

UR - https://www.scopus.com/pages/publications/33845231617

U2 - 10.1016/j.regsciurbeco.2006.08.002

DO - 10.1016/j.regsciurbeco.2006.08.002

M3 - Article

SN - 0166-0462

VL - 37

SP - 121

EP - 136

JO - Regional Science and Urban Economics

JF - Regional Science and Urban Economics

IS - 1

ER -

Do local tax incentives affect economic growth? What mean impacts miss in the analysis of enterprise zone policies

Abstract

UN SDGs

Keywords

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