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The Impact of State Government Subsidies and Tax Credits in an Emerging Industry: Ethanol Production 1980–2007

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  • Chad Cotti
  • Mark Skidmore

Abstract

This article examines the effects of state economic development incentives in the emerging ethanol industry. We compiled data on ethanol production capacity and subsidies/tax credits for all states for the years 1980–2007, a period that covers the complete emergence of the biofuel industry in the United States. Importantly, this time period was characterized by the passage of several state‐level subsidies and tax breaks aimed at increasing ethanol production. Hence, this panel documents a substantial amount of within‐state variation in policies from which to identify an effect. We find that some incentives directed at ethanol production have a significant effect on a state's production capacity.

Suggested Citation

  • Chad Cotti & Mark Skidmore, 2010. "The Impact of State Government Subsidies and Tax Credits in an Emerging Industry: Ethanol Production 1980–2007," Southern Economic Journal, John Wiley & Sons, vol. 76(4), pages 1076-1093, April.
  • Handle: RePEc:wly:soecon:v:76:y:2010:i:4:p:1076-1093
    DOI: 10.4284/sej.2010.76.4.1076
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    Cited by:

    1. Hailin Yao & Wei Huang, 2022. "Effect of R&D Subsidies on External Collaborative Networks and the Sustainable Innovation Performance of Strategic Emerging Enterprises: Evidence from China," Sustainability, MDPI, vol. 14(8), pages 1-19, April.
    2. Judith Banda-Guzman & Alejandra Lopez-Salazar, 2014. "Success Factors in Pepper Greenhouses - Case Study: Queretaro, Mexico," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 5(3), pages 96-107, May.

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