High-Tech Employment And State Economic Development Policies
States have attempted to attract industries by offering a variety of tax incentives and economic development programs with mixed success. States have recently begun to focus on high-tech industries, where average wages are significantly above the all industry average. This study analyzes whether a state's tax and expenditure mix can influence high-tech industry location. Empirically, this study advances previous high-tech research by carefully modelling the government budget constraint and by considering more recent data. One emphasis will be whether rural states are inherently unable to attract high-tech industry and its high-paying jobs. In general, the empirical results suggest that a state's fiscal policies can attract high-tech fums, but states must proceed very cautiously. Furthermore, rural states are not dealt out of the high-tech game.
References listed on IDEAS
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- MacKinnon, James G, 1992. "Model Specification Tests and Artificial Regressions," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 102-146, March.
- Helms, L Jay, 1985. "The Effect of State and Local Taxes on Economic Growth: A Time Series-Cross Section Approach," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 574-582, November.
- Treyz, George I., 1991. "Causes of changes in wage variation among states," Journal of Urban Economics, Elsevier, vol. 29(1), pages 50-62, January.
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- Newman, Robert J. & Sullivan, Dennis H., 1988. "Econometric analysis of business tax impacts on industrial location: What do we know, and how do we know it?," Journal of Urban Economics, Elsevier, vol. 23(2), pages 215-234, March.
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