EconPapers    
Economics at your fingertips  
 

The Effect of Enterprise Zone-Related Tax Savings on Economic Development: A Generalized Propensity Score Approach

Anita Yadavalli ()
Additional contact information
Anita Yadavalli: City Fiscal Policy, National League of Cities, 660 N. Capitol St. NW, Washington, D.C. 20001, U.S.A.

Review of Economics & Finance, 2017, vol. 10, 83-96

Abstract: Since their onset in the early 1980s, enterprise zones (EZ) have been utilized for the revitalization of traditional downtown areas or old industrial and manufacturing areas that have undergone a protracted period of decline. Businesses within EZs often receive some combination of labor and/or capital tax incentives. This article examines various measures of economic development during the period 2006 to 2015 for Indiana firms receiving at least one tax incentive. This relationship is examined using a generalized propensity score model in an effort to remove the potential endogeneity between tax savings to each EZ business and economic development. The results suggest that, on average, employment tends to rise more significantly for firms receiving a modest amount in tax incentives than for those receiving above-average amounts. However, this is not the case for capital investment, where firms receiving modest amounts do not invest any differently than firms receiving above-average amounts. Additionally, the results suggest that fewer savings are being translated into higher wages for employees as firms continue to receive tax incentives.

Keywords: Enterprise zones; Economic development; Employment; Wages; Capital investment; Generalized propensity score (search for similar items in EconPapers)
JEL-codes: C21 H25 O12 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.bapress.ca/ref/ref-article/1923-7529-2017-04-83-14.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bap:journl:170407

Ordering information: This journal article can be ordered from
17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada

Access Statistics for this article

Review of Economics & Finance is currently edited by H. Carlson

More articles in Review of Economics & Finance from Better Advances Press, Canada 17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada.
Series data maintained by Carlson ().

 
Page updated 2017-12-04
Handle: RePEc:bap:journl:170407