Local Fiscal Policy and Establishment Growth

Todd Gabe

Journal of Regional Analysis and Policy, 2003, vol. 33, issue 01, 24

Abstract: This applied study examines the effects of local taxes and government spending on the employment growth of 17,172 Maine establishments that were in operation in 1996 and 1999. Empirical results indicate that taxes have a negative effect on an establishment’s three-year employment growth rate, although the tax effects are quite small in magnitude. These results are robust to the omission of establishments located in municipalities that cause group effects in the regression analysis. The negative tax effects are not statistically significant, however, in regressions that correct for sample selection bias related to establishment closures. In general, the empirical findings do not reveal a significant relationship between establishment growth and several types of local government spending.

Keywords: Financial; Economics (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:jrapmc:132246

DOI: 10.22004/ag.econ.132246

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