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The Effect of State Economic Development Incentives on Employment Growth of Establishments

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  • Todd M. Gabe
  • David S. Kraybill

Abstract

This paper examines the effects of state economic development incentives on the growth of 366 Ohio manufacturing and nonmanufacturing establishments that launched major expansions between 1993 and 1995. Growth is measured as the actual employment change that occurred in these establishments and as the employment growth announced when expansions were launched. Empirical findings indicate that incentives have very little (or even a negative) effect on actual growth and they have a substantial positive effect on announced growth. Findings also suggest that establishments that received incentives overestimated their announced employment targets more than establishments that did not receive incentives.

Suggested Citation

  • 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.
    • Handle: RePEc:bla:jregsc:v:42:y:2002:i:4:p:703-730
    DOI: 10.1111/1467-9787.00278
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