IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/halshs-00728195.html
   My bibliography  Save this paper

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

Author

Listed:
  • Luc Behaghel

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - 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 - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, 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 Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

  • Adrien Lorenceau

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - 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 - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Simon Quantin

    (Institut national de la statistique et des études économiques (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," Working Papers halshs-00728195, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00728195
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00728195
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-00728195/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. Papke, Leslie E., 1994. "Tax policy and urban development : Evidence from the Indiana enterprise zone program," Journal of Public Economics, Elsevier, vol. 54(1), pages 37-49, May.
    3. Devereux, Michael P. & Griffith, Rachel & Simpson, Helen, 2007. "Firm location decisions, regional grants and agglomeration externalities," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 413-435, April.
    4. Givord, Pauline & Quantin, Simon & Trevien, Corentin, 2018. "A long-term evaluation of the first generation of French urban enterprise zones," Journal of Urban Economics, Elsevier, vol. 105(C), pages 149-161.
    5. 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.
    6. Duflo, Esther & Glennerster, Rachel & Kremer, Michael, 2008. "Using Randomization in Development Economics Research: A Toolkit," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 61, pages 3895-3962, Elsevier.
    7. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    8. Joel A. Elvery, 2009. "The Impact of Enterprise Zones on Resident Employment," Economic Development Quarterly, , vol. 23(1), pages 44-59, February.
    9. 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.
    10. Neumark, David & Kolko, Jed, 2010. "Do enterprise zones create jobs? Evidence from California's enterprise zone program," Journal of Urban Economics, Elsevier, vol. 68(1), pages 1-19, July.
    11. Lee, David S., 2008. "Randomized experiments from non-random selection in U.S. House elections," Journal of Econometrics, Elsevier, vol. 142(2), pages 675-697, February.
    12. Ham, John C. & Swenson, Charles & İmrohoroğlu, Ayşe & Song, Heonjae, 2011. "Government programs can improve local labor markets: Evidence from State Enterprise Zones, Federal Empowerment Zones and Federal Enterprise Community," Journal of Public Economics, Elsevier, vol. 95(7), pages 779-797.
    13. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
    14. Bondonio, Daniele & Greenbaum, Robert T., 2007. "Do local tax incentives affect economic growth? What mean impacts miss in the analysis of enterprise zone policies," Regional Science and Urban Economics, Elsevier, vol. 37(1), pages 121-136, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    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

    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. Behaghel, Luc & Lorenceau, Adrien & Quantin, Simon, 2015. "Replacing churches and mason lodges? Tax exemptions and rural development," Journal of Public Economics, Elsevier, vol. 125(C), pages 1-15.
    2. Givord, Pauline & Quantin, Simon & Trevien, Corentin, 2018. "A long-term evaluation of the first generation of French urban enterprise zones," Journal of Urban Economics, Elsevier, vol. 105(C), pages 149-161.
    3. Thierry Mayer & Florian Mayneris & Loriane Py, 2017. "The impact of Urban Enterprise Zones on establishment location decisions and labor market outcomes: evidence from France," Journal of Economic Geography, Oxford University Press, vol. 17(4), pages 709-752.
    4. Neumark, David & Simpson, Helen, 2015. "Place-Based Policies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1197-1287, Elsevier.
    5. Thierry Mayer & Florian Mayneris & Loriane Py, 2017. "The impact of Urban Enterprise Zones on establishment location decisions and labor market outcomes: evidence from France," Journal of Economic Geography, Oxford University Press, vol. 17(4), pages 709-752.
    6. Givord, Pauline & Rathelot, Roland & Sillard, Patrick, 2013. "Place-based tax exemptions and displacement effects: An evaluation of the Zones Franches Urbaines program," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 151-163.
    7. repec:hal:spmain:info:hdl:2441/1nfkh9tn2m87ko6gb634e2ufgl is not listed on IDEAS
    8. Thierry MAYER & Florian MAYNERIS & Loriane PY, 2012. "The Impact of Urban Enterprise Zones on Establishments' Location Decisions: Evidence from French ZFUs," LIDAM Discussion Papers IRES 2012019, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    9. repec:hal:spmain:info:hdl:2441/125h4fg7e89gi95ui3ml6ggod9 is not listed on IDEAS
    10. repec:hal:spmain:info:hdl:2441/3l4arseauo82kr3cm0qr8uihmg is not listed on IDEAS
    11. 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.
    12. Thierry Mayer & Florian Mayneris & Loriane Py, 2017. "The impact of Urban Enterprise Zones on establishment location decisions and labor market outcomes: evidence from France," Journal of Economic Geography, Oxford University Press, vol. 17(4), pages 709-752.
    13. Gobillon, Laurent & Magnac, Thierry & Selod, Harris, 2012. "Do unemployed workers benefit from enterprise zones? The French experience," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 881-892.
    14. Freedman, Matthew, 2012. "Teaching new markets old tricks: The effects of subsidized investment on low-income neighborhoods," Journal of Public Economics, Elsevier, vol. 96(11), pages 1000-1014.
    15. Gibbons, Stephen & Overman, Henry & Sarvimäki, Matti, 2021. "The local economic impacts of regeneration projects: Evidence from UK's single regeneration budget," Journal of Urban Economics, Elsevier, vol. 122(C).
    16. Sumei Zhang, 2015. "Impacts of Enterprise Zone Policy on Industry Growth," Economic Development Quarterly, , vol. 29(4), pages 347-362, November.
    17. 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.
    18. Patrick Kline & Enrico Moretti, 2014. "People, Places, and Public Policy: Some Simple Welfare Economics of Local Economic Development Programs," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 629-662, August.
    19. Miren Lafourcade & Florian Mayneris, 2017. "En Finir avec les ghettos urbains ?," PSE-Ecole d'économie de Paris (Postprint) halshs-01884340, HAL.
    20. Judith K. Hellerstein & David Neumark, 2011. "Employment in Black Urban Labor Markets: Problems and Solutions," NBER Working Papers 16986, National Bureau of Economic Research, Inc.
    21. Accetturo, Antonio & de Blasio, Guido, 2012. "Policies for local development: An evaluation of Italy's “Patti Territoriali”," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 15-26.
    22. Neumark, David & Kolko, Jed, 2010. "Do enterprise zones create jobs? Evidence from California's enterprise zone program," Journal of Urban Economics, Elsevier, vol. 68(1), pages 1-19, July.
    23. Sumei Zhang, 2019. "Rethinking U.S. enterprise zones: The role of research design in program evaluation," Local Economy, London South Bank University, vol. 34(6), pages 545-571, September.

    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:hal:wpaper:halshs-00728195. 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.