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Tax exemptions and rural development: Evidence from a quasi-experiment

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  • Luc Behaghel

    (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique)

  • Adrien Lorenceau

    (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

  • Simon Quantin

    (INSEE - Institut National de la Statistique et des Etudes Economiques - INSEE)

Abstract

This paper provides quasi-experimental (RDD) estimates of the impact of a tax credit program targeted at less densely populated areas. The program was launched in the mid 1990s in rural France and includes corporate and payroll tax exemptions. Variations over time and across rm types allow un-bundling the overall program impact into three components: a quite restrictive, short-term (1-year) payroll tax exemption on new hires; permanent payroll tax exemptions in the non-pro t sector; and corporate tax exemptions for new rms. We nd no signi cant impact of the program on total employment or the number of plants, and no impact of the di erent program components on targeted subsets of rms. Large positive e ects can be statistically rejected.

Suggested Citation

  • Luc Behaghel & Adrien Lorenceau & Simon Quantin, 2012. "Tax exemptions and rural development: Evidence from a quasi-experiment," PSE Working Papers halshs-00728195, HAL.
  • Handle: RePEc:hal:psewpa:halshs-00728195
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00728195
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    References listed on IDEAS

    as
    1. Adrien Lorenceau, 2009. "L’impact d’exonérations fiscales sur la création d’établissements et l’emploi en France rurale : une approche par discontinuité de la régression," Économie et Statistique, Programme National Persée, vol. 427(1), pages 27-62.
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    4. Matias Busso & Patrick Kline, 2008. "Do Local Economic Development Programs Work? Evidence from the Federal Empowerment Zone Program," Cowles Foundation Discussion Papers 1639, Cowles Foundation for Research in Economics, Yale University.
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    6. Anthony Briant & Miren Lafourcade & Benoît Schmutz, 2015. "Can Tax Breaks Beat Geography? Lessons from the French Enterprise Zone Experience," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 88-124, May.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Tax credits for economic development do not work
      by Economic Logician in Economic Logic on 2012-09-25 19:43:00

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    Keywords

    Tax exemptions; Rural Development; Enterprise Zones;

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