IDEAS home Printed from https://ideas.repec.org/a/taf/nzecpp/v42y2008i2p213-232.html
   My bibliography  Save this article

Governments at the bidding table

Author

Listed:
  • Johannes Van Biesebroeck

Abstract

The New Zealand government has recently indicated it will scale back its subsidy program for foreign firms investing in the country, except for screen productions, and divert the budgeted funds to an outward investment strategy. In sharp contrast, local governments have lately shown a much greater willingness to subsidize cultural or sporting events in order to boost local economic activity. I evaluate under what circumstances it makes sense for a government to subsidize private investments, paying particular attention to interjurisdictional competition. I show what factors determine equilibrium subsidy levels when governments enter a bidding war, and derive the expected welfare gain.

Suggested Citation

  • Johannes Van Biesebroeck, 2008. "Governments at the bidding table," New Zealand Economic Papers, Taylor & Francis Journals, vol. 42(2), pages 213-232.
    • Handle: RePEc:taf:nzecpp:v:42:y:2008:i:2:p:213-232
    DOI: 10.1080/00779950809544422
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00779950809544422
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00779950809544422?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Michael Greenstone & Richard Hornbeck & Enrico Moretti, 2008. "Identifying Agglomeration Spillovers: Evidence from Million Dollar Plants," Working Paper series 36_08, Rimini Centre for Economic Analysis.
    2. Michael Greenstone & Enrico Moretti, 2003. "Bidding for Industrial Plants: Does Winning a 'Million Dollar Plant' Increase Welfare?," NBER Working Papers 9844, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Johannes Van Biesebroeck, 2010. "Bidding for Investment Projects: Smart Public Policy or Corporate Welfare?," Canadian Public Policy, University of Toronto Press, vol. 36(s1), pages 31-48, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jasper Van Dijk, 2014. "Determinants of Local Multipliers," ERSA conference papers ersa14p57, European Regional Science Association.
    2. William C. Strange, 2009. "Viewpoint: Agglomeration research in the age of disaggregation," Canadian Journal of Economics, Canadian Economics Association, vol. 42(1), pages 1-27, February.
    3. Card, David & Hallock, Kevin F. & Moretti, Enrico, 2010. "The geography of giving: The effect of corporate headquarters on local charities," Journal of Public Economics, Elsevier, vol. 94(3-4), pages 222-234, April.
    4. Moretti, Enrico & Wilson, Daniel J., 2014. "State incentives for innovation, star scientists and jobs: Evidence from biotech," Journal of Urban Economics, Elsevier, vol. 79(C), pages 20-38.
    5. William Hoyt & Christopher Jepsen & Kenneth Troske, 2009. "Business Incentives and Employment: What Incentives Work and Where?," Working Papers 2009-02, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
    6. Mark D. Partridge & M. Rose Olfert, 2011. "The Winners' Choice: Sustainable Economic Strategies for Successful 21st-Century Regions," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(2), pages 143-178.
    7. Jasper Van Dijk, 2014. "Local Multipliers, Unemployment and Migration: An Empirical Analysis of the United States," ERSA conference papers ersa14p504, European Regional Science Association.
    8. Van, Johannes Biesebroeck, 2008. "Policy Watch: Governments at the Bidding Table," Working Paper Series 3981, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    9. Walker Hanlon & Antonio Miscio, 2014. "Agglomeration: A Dynamic Approach," NBER Working Papers 20728, National Bureau of Economic Research, Inc.
    10. Edward L. Glaeser & Joshua D. Gottlieb, 2009. "The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 983-1028, December.
    11. Johannes Van Biesebroeck, 2010. "Bidding for Investment Projects: Smart Public Policy or Corporate Welfare?," Canadian Public Policy, University of Toronto Press, vol. 36(s1), pages 31-48, April.
    12. Jasper van Dijk, 2015. "Investing in lagging regions is efficient: a local multipliers analysis of U.S. cities," ERSA conference papers ersa15p146, European Regional Science Association.
    13. Emily E. Wiemers, 2017. "The Celtic Tiger and home leaving among Irish young adults," Review of Economics of the Household, Springer, vol. 15(1), pages 199-222, March.
    14. Jasper van Dijk, 2016. "Investing In Lagging Regions Is Efficient: A Local Multipliers Analysis Of U.S. Cities," Economics Series Working Papers 776, University of Oxford, Department of Economics.
    15. Fernando M. Aragon, 2014. "Do better property rights improve local income?: Evidence from First Nations' treaties," Discussion Papers dp14-02, Department of Economics, Simon Fraser University.
    16. Ferdinando Monte & Stephen J. Redding & Esteban Rossi-Hansberg, 2018. "Commuting, Migration, and Local Employment Elasticities," American Economic Review, American Economic Association, vol. 108(12), pages 3855-3890, December.
    17. Arezki, Rabah & Fetzer, Thiemo & Pisch, Frank, 2017. "On the comparative advantage of U.S. manufacturing: Evidence from the shale gas revolution," Journal of International Economics, Elsevier, vol. 107(C), pages 34-59.
    18. Anna Alberini, 2007. "Determinants And Effects On Property Values Of Participation In Voluntary Cleanup Programs: The Case Of Colorado," Contemporary Economic Policy, Western Economic Association International, vol. 25(3), pages 415-432, July.
    19. Bundrick, Jacob & Snyder, Thomas, 2017. "Do Business Subsidies Lead to Increased Economic Activity? Evidence from Arkansas’s Quick Action Closing Fund," Working Papers 07793, George Mason University, Mercatus Center.
    20. Hopp, Daniel & Kriebel, Michael, 2019. "The political economy of interregional competition for firms," Regional Science and Urban Economics, Elsevier, vol. 79(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:nzecpp:v:42:y:2008:i:2:p:213-232. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://www.tandfonline.com/RNZP20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.