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Do Enterprise Zones Work?

Author

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  • Stephen Billings

    (University of North Carolina-Charlotte)

Abstract

This article analyzes Enterprise Zones in Colorado to study the relationship between geographically targeted tax credits and the location of new businesses and jobs. Enterprise Zone (EZ) programs provide tax incentives for investment and job creation in economically lagging regions. While most states have EZ programs, past program evaluations have found a mixture of effectiveness. This research improves on existing literature by utilizing both establishment-level data and a border effects methodology (1) to control for unobservables that influence the self-selection of EZ regions and (2) to highlight EZ impacts across different industries. Results find that while EZ fiscal incentives have no effect on where new establishments locate in Colorado, they do increase the number of employees hired. Industry results highlight the heterogeneity of tax credit impacts within the EZ Program. Results are robust to a variety of specifications for land-use controls and in comparison to a propensity score matching model.

Suggested Citation

  • Stephen Billings, 2009. "Do Enterprise Zones Work?," Public Finance Review, , vol. 37(1), pages 68-93, January.
  • Handle: RePEc:sae:pubfin:v:37:y:2009:i:1:p:68-93
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    Citations

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    Cited by:

    1. Mayer, Thierry & Mayneris, Florian & Py, Loriane, 2012. "The Impact of Urban Enterprise Zones on Establishments' Location Decisions: Evidence from French ZFUs," CEPR Discussion Papers 9074, C.E.P.R. Discussion Papers.
    2. Christopher Coyne & Lotta Moberg, 2015. "The political economy of state-provided targeted benefits," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(3), pages 337-356, September.
    3. Neumark, David & Simpson, Helen, 2015. "Place-Based Policies," Handbook of Regional and Urban Economics, Elsevier.
    4. Florian MAYNERIS & Loriane PY, 2013. "The Efficiency Of Enterprise Zone Programs Some Conflicting Results?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 209-224.
    5. Piotr Ciżkowicz & Magda Ciżkowicz-Pękała & Piotr Pękała & Andrzej Rzońca, 2015. "The effects of special economic zones on employment and investment: spatial panel modelling perspective," NBP Working Papers 208, Narodowy Bank Polski, Economic Research Department.

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