Do Geographically Targeted Development Incentives Revitalize Communities? Evidence From the State Enterprise Zone Programs
Author: Daniele Bondonio
Dissertation School: Carnegie Mellon University
Pages: 106
Publication Date: November 2000
Availability:
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Access Number: 10723
Descriptors:
Business stimulation. Business relocation incentives.
Abstract:
This doctoral dissertation investigates what can be learned regarding the impact of different state Enterprise Zone (EZ) policy features on the economic activity (measured by employment, value of shipments, capital expenditures and earnings) of the communities targeted by the intervention. The first part is devoted to identifying and developing a variety of non-experimental estimators. In the remaining parts, state EZ programs are analyzed by operationalyzing both the heterogeneity of the specific policy implementation features and the fact that zones might target different types of establishments. The results of the analysis show that EZ policies have different impacts on different types of establishments. Zone designation is found to increase the growth of jobs, production and capital expenditures brought about by new establishments. This positive impact, however, is crucially affected by the extension of the state program: states that designate a lower number of zones attract more employment and more economic activity than states with a larger zone land coverage. Tying zone incentives to job creation is found to be the only specific EZ feature that promotes employment growth in existing establishments. Finally, zone designation is found to accelerate the loss of employment and to be ineffective in slowing down the loss of production and capital expenditure accounted for by the zone establishments going out of business. Based on these findings, a number of policy recommendations are offered to help refine future geographically-targeted economic development initiatives. [AUTHOR ABSTRACT MODIFIED]
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