Geographically-targeted tax incentives remain popular initiatives in response to deteriorating economic conditions of urban and industrial areas. This paper exploits the exogenous variations of the U.S. state Enterprise Zone programs to estimate the impact of various incentive features on a number of dimensions of local economic growth. The econometric analysis uses plant level data to sort out growth outcomes into gross flows separately accounted for by new, existing, and vanishing businesses in the target areas. Results offer empirical evidence to support a number of specific policy recommendations and show that the impact of the incentives has more complex dynamics than those revealed by the null mean impact estimates obtained from analyzing net growth outcomes.
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Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number
03-17.
Find related papers by JEL classification: O1 - Economic Development, Technological Change, and Growth - - Economic Development R5 - Urban, Rural, and Regional Economics - - Regional Government Analysis C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
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