Are incentives to attract investments effective? An analysis of Brazilian municipalities

Fabiana Rocha () and Veronica Orellano ()
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Fabiana Rocha: University of São Paulo
Veronica Orellano: Fundação Getúlio Vargas

Economics Bulletin, 2020, vol. 40, issue 1, 534-541

Abstract: This article aims to evaluate the impact of incentives to attract investments on formal employment in Brazilian municipalities, where these incentives are offered in the form of tax exemptions and through land donations/transfer of rights. It differs from the rest of the literature, which is concerned with strategic interactions among governments and generally focuses only on one instrument, namely, tax rates. The results indicate that tax exemptions have no effect, whereas land donations/transfer of rights seem to stimulate job creation only in the expansionary phase of the cycle.

Keywords: tax exemptions; land donations; transfer of rights; employment; municipalities; Brazil (search for similar items in EconPapers)
JEL-codes: H2 H7 (search for similar items in EconPapers)
Date: 2020-02-15
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