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Regional Incentives and Industrial Location in Puerto Rico

Author

Listed:
  • Paulo Guimaraes

    (Escola de Economia e Gestão, Universidade do Minho, 4700 Braga, Portugal, paulog@ci.uminho.pt)

  • Robert J. Rolfe

    (School of Accounting, University of South Carolina, Columbia, SC 29208 USA, rolfer@ddarla.badm.sc.edu)

  • Douglas P. Woodward

    (Department of Economics, University of South Carolina, Columbia, SC 29208 USA, woodward@darla.badm.sc.edu)

Abstract

This study uses nested logit to estimate the influence of industrial incentives on the location of manufacturing plants in Puerto Rico. Puerto Rican laws grant generous tax exemptions and provide other incentives for investments in less developed, peripheral regions of the island. Focusing on Puerto Rico allowed us to isolate and test location factors in a closed environment where 76 municipalities received a development zone designation and competed directly against one another for new plants. Simulations indicated that the regional incentive policy reallocated relatively few of the greenfield investments from the congested core to the periphery of the island.

Suggested Citation

  • Paulo Guimaraes & Robert J. Rolfe & Douglas P. Woodward, 1998. "Regional Incentives and Industrial Location in Puerto Rico," International Regional Science Review, , vol. 21(2), pages 119-138, August.
    • Handle: RePEc:sae:inrsre:v:21:y:1998:i:2:p:119-138
    DOI: 10.1177/016001769802100202
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    References listed on IDEAS

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    1. Guimaraes, Paulo & Figueiredo, Octavio & Woodward, Douglas, 2000. "Agglomeration and the Location of Foreign Direct Investment in Portugal," Journal of Urban Economics, Elsevier, vol. 47(1), pages 115-135, January.
    2. Salvador Barrios & Holger Görg & Eric Strobl, 2006. "Multinationals' Location Choice, Agglomeration Economies, and Public Incentives," International Regional Science Review, , vol. 29(1), pages 81-107, January.
    3. Lahiri, Kajal & Gao, Jian, 2002. "Bayesian analysis of nested logit model by Markov chain Monte Carlo," Journal of Econometrics, Elsevier, vol. 111(1), pages 103-133, November.
    4. Maria Ikegawa & Suminori Tokunaga, 2018. "Location choice for Japanese frozen food industry in East Asia using domestic market access with the penetration rate of refrigerators," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(1), pages 209-227, July.
    5. Jonathan Jones, 2017. "Agglomeration economies and the location of foreign direct investment: A meta-analysis," Journal of Regional Science, Wiley Blackwell, vol. 57(5), pages 731-757, November.
    6. Jean-Louis Mucchielli & Florence Puech, 2003. "Internationalisation et localisation des firmes multinationales : l'exemple des entreprises françaises en Europe," Économie et Statistique, Programme National Persée, vol. 363(1), pages 129-144.
    7. Nalin Kumar Ramaul & Pinki Ramaul, 2018. "Regional Incentives and Location Choice of New Firms in India: A Nested Logit Model," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 16(2), pages 501-525, June.
    8. Laurie A. Ortiz-Rivera & Elías Sanz-Casado & Carlos A. Suárez-Balseiro, 2000. "Scientific Production in Puerto Rico in Science and Technology during the Period 1990 to 1998," Scientometrics, Springer;Akadémiai Kiadó, vol. 49(3), pages 403-418, November.
    9. Charisia Vlachou & Olga Iakovidou, 2015. "The Evolution Of Studies On Business Location Factors," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 20(04), pages 1-23, December.
    10. repec:rre:publsh:v:38:y:2008:i:1:p:67-88 is not listed on IDEAS
    11. Dafna Schwartz & Joseph Pelzman & Michael Keren, 2008. "The Ineffectiveness of Location Incentive Programs," Economic Development Quarterly, , vol. 22(2), pages 167-179, May.
    12. Guimaraes, Paulo & Figueiredo, Octávio & Woodward, Douglas, 2002. "Modeling industrial location decisions in U.S. counties," ERSA conference papers ersa02p060, European Regional Science Association.
    13. Wang, Xiao & Deltas, George & Khanna, Madhu & Bi, Xiang, 2017. "Community Pressure and the Relocation of Toxic Facilities," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258390, Agricultural and Applied Economics Association.
    14. Conroy, Tessa & Deller, Steven & Tsvetkova, Alexandra, 2016. "Regional business climate and interstate manufacturing relocation decisions," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 155-168.
    15. Luisa Alamá-Sabater & Andrés Artal-Tur & José Navarro-Azorín, 2011. "Industrial location, spatial discrete choice models and the need to account for neighbourhood effects," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(2), pages 393-418, October.
    16. Marian Dinga, 2011. "The Role of Investment Incentives in Regional FDI Reallocation: A Regression-Discontinuity Approach," CERGE-EI Working Papers wp438, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

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