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.
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