State Economic Incentives: Stimulus or Reallocation?  

Oleh:

Calcagno, Peter T. ; Thompson, Henry

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Public Finance Review vol. 32 no. 6 (Nov. 2004), page 651-665.
Topik: economic incentives; net impact; reallocation
Fulltext: 651PFR326.pdf (108.56KB)

Isi artikel

This article estimates the effects of state economic incentives during the 1980s and interprets results in the context of a general-equilibrium specific-factorsmodel of production. The issue is whether investment incentives had a net positive impact on manufacturing value added because subsidized firms would pull resources fromthe rest of the state economy. The public finance literature provides the foundation of the econometric model.Empirical results are consistent with theoretical predictions of the specific-factors model that resources would come from other sectors. Incentives are associatedwith a reduction in manufacturing value added.

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