Advanced Search
MyIDEAS: Login to save this article or follow this journal

Getting What You Pay For: The Case of Southern Economic Development

Contents:

Author Info

  • Rork, Jonathan C.
Registered author(s):

    Abstract

    For the past fifty years, states of the American South have been competing with one another in order to recruit businesses to locate within their borders. While previous research has focused on assessing the short-term success of a tax-based recruitment plan, this paper addresses an important gap in the literature by looking at the long-term consequences that such a development policy can impose on a state’s industrial structure. By incorporating the role of firm mobility, this paper demonstrates that at the state level, the effect of lowering the corporate income tax on the factor intensity of a state’s manufacturing industries is theoretically ambiguous because it is dependent on the type of firm that finds it easier to move. Using historical data from 1957-1992 and a dynamic, partial adjustment model, this paper establishes an empirical link between low corporate tax rates and labor-intensive manufacturing industries, thereby suggesting that a low-tax policy is encouraging the immigration of footloose, laborintensive firms. Moreover, the paper finds that the labor used tends to be of an unskilled (production) nature, even as the national trend is to substitute away from unskilled labor into skilled labor.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://purl.umn.edu/132308
    Download Restriction: no

    Bibliographic Info

    Article provided by Mid-Continent Regional Science Association in its journal Journal of Regional Analysis and Policy.

    Volume (Year): 35 (2005)
    Issue (Month): 2 ()
    Pages:

    as in new window
    Handle: RePEc:ags:jrapmc:132308

    Contact details of provider:
    Web page: http://jrap-journal.org/index.htm
    More information through EDIRC

    Related research

    Keywords: Industrial Organization; Labor and Human Capital;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Rork, Jonathan C., 2003. "Coveting Thy Neighbors' Taxation," National Tax Journal, National Tax Association, vol. 56(4), pages 775-87, December.
    2. Gabe, Todd M., 2003. "Local Fiscal Policy and Establishment Growth," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 33(1).
    3. King, I. & McAfee, R.P. & Welling, L., 1990. "Industrial Blackmail," Papers 130, Calgary - Department of Economics.
    4. Taylor, Leon, 1992. "Infrastructural competition among jurisdictions," Journal of Public Economics, Elsevier, vol. 49(2), pages 241-259, November.
    5. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle.
    6. Coughlin, Cletus C & Terza, Joseph V & Arromdee, Vachira, 1991. "State Characteristics and the Location of Foreign Direct Investment within the United States," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 675-83, November.
    7. Timothy C. Ford & Jonathan C. Rork & Bruce T. Elmslie, 2008. "Foreign Direct Investment, Economic Growth, and the Human Capital Threshold: Evidence from US States," Review of International Economics, Wiley Blackwell, vol. 16(1), pages 96-113, 02.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Conway, Karen Smith & Rork, Jonathan C., 2012. "The Genesis Of Senior Income Tax Breaks," National Tax Journal, National Tax Association, vol. 65(4), pages 1043-68, December.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ags:jrapmc:132308. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.