Investment Tax Credits and the Response of Firms

Adrian Lerche
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Adrian Lerche: Institute for Employment Research (IAB), Nuremberg, Germany ; LMU Munich ; IZA

No 202228, IAB-Discussion Paper from Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]

Abstract: "This paper estimates the direct effects of investment tax credits on firms’ production behavior and the additional indirect effects arising from agglomeration economies. Exploiting a change in tax credit rates by firm size in Germany, I find that manufacturing firms increase capital and employment, with labor demand in information and communication technology-intensive industries shifting towards college-educated workers. Using geolocation data, I show that agglomeration benefits lead to a sizable further firm production expansion with these benefits materializing within distances of 5 kilometers. Worker flows from the service sector and from non-employment, rather than between manufacturing firms, explain the employment effects." (Author's abstract, IAB-Doku) ((en))

Keywords: Bundesrepublik Deutschland; Ostdeutschland; IAB-Open-Access-Publikation; Auswirkungen; Ballungsraum; Beschäftigungseffekte; IAB-Beschäftigtenhistorik; Industrieproduktion; Investitionsförderung; Investitionsquote; Investitionsverhalten; Investitionszulage; Kapitalstock; labour turnover; produzierendes Gewerbe; regionale Wirtschaftsförderung; qualifikationsspezifische Faktoren; Steuerentlastung; Arbeitskräftenachfrage; Umsatzentwicklung; Unternehmen; 1995-2004 (search for similar items in EconPapers)
JEL-codes: D22 H25 H32 J23 R11 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2022-12-27
New Economics Papers: this item is included in nep-geo, nep-ict, nep-lma, nep-pbe, nep-pub and nep-tid
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Citations: View citations in EconPapers (2)

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https://doi.org/10.48720/IAB.DP.2228

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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:202228

DOI: 10.48720/IAB.DP.2228

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