Are Local Economic Development Incentives Promoting Job Growth? An Empirical Case Study
AbstractAt a time when cities are competing with one another to attract or retain jobs within a globalizing economy, city governments are providing an array of financial incentives to stimulate job growth and retain existing jobs, particularly in high cost locations. This paper provides the first systematic and comprehensive analysis of datasets on economic development incentives in New York City over the last fifteen years. The evidence on job retention and creation is mixed. Although many companies do not meet their agreed-upon job targets in absolute terms, the evidence suggests that companies receiving subsidies outperform their respective industries in terms of employment growth, that is, the grow more, or decline less. We emphasize that this finding is difficult to interpret, since firms receiving incentives may not be representative of the industry as a whole. In other words, their above-average performance may simply reflect the fact that the Economic Development Corporation (EDC) selects economically promising companies within manufacturing (or other industries) when granting incentives. At the same time, it is also possible that receiving incentives helps these companies to become stronger.
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Bibliographic InfoPaper provided by Henley Business School, Reading University in its series Real Estate & Planning Working Papers with number rep-wp2008-10.
Length: 41 pages
Date of creation: 2008
Date of revision:
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More information through EDIRC
economic development incentives; job growth; manufacturing; subsidies; urban development; economic development policy;
Other versions of this item:
- Fuerst, Franz & Mollenkopf, John, 2005. "Are Local Economic Development Incentives Promoting Job Growth? An Empirical Case Study," MPRA Paper 11444, University Library of Munich, Germany.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
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.:
- Todd M. Gabe & David S. Kraybill, 2002. "The Effect of State Economic Development Incentives on Employment Growth of Establishments," Journal of Regional Science, Wiley Blackwell, vol. 42(4), pages 703-730.
- Timothy J. Bartik, 2000.
"Jobs, Productivity, and Local Economic Development: What Implications Does Economic Research Have for the Role of Government?,"
Book chapters authored by Upjohn Institute researchers,
in: Robert W. Wassmer (ed.), Readings in Urban Economics: Issues and Public Policy, pages 72-122
W.E. Upjohn Institute for Employment Research.
- Timothy J. Bartik, 1999. "Jobs, Productivity, and Local Economic Development: What Implications Does Economic Research Have for the Role of Government?," Book chapters authored by Upjohn Institute researchers, in: Joel Slemrod (ed.), Tax policy in the Real World, pages 269-283 W.E. Upjohn Institute for Employment Research.
- Bartik, Timothy J., 1994. "Jobs, Productivity, and Local Economic Development: What Implications Does Economic Research Have for the Role of Government?," National Tax Journal, National Tax Association, vol. 47(4), pages 847-61, December .
- Timothy J. Bartik, . "Jobs, Productivity, and Local Economic Development: What Implications Does Economic Research Have for the Role of Government?," Upjohn Working Papers and Journal Articles tjb1994ntj, W.E. Upjohn Institute for Employment Research.
- Robert Tannenwald, 1996. "State business tax climate: how should it be measured and how important is it?," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 23-38.
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