Do entrepreneur-focused facility incentives create economic impacts? Evidence from Indiana

Michael Hicks and Dagney Faulk

Journal of Entrepreneurship and Public Policy, 2018, vol. 7, issue 3, 222-234

Abstract: Purpose - As a component of a benefit-cost analysis into the efficacy of publicly funded facility incentives, the purpose of this paper is to examine the county-wide impact of business incubators, makerspaces and co-working spaces on employment, proprietor’s employment and the average wage per job. The period under analysis is 1971 through 2015 across Indiana’s 92 counties. Design/methodology/approach - Using a unique data set on facility incentives in Indiana, a spatial panel model, which includes a unique identification strategy to account for underlying conditions identified as a source of incubator success in earlier studies, is developed. Findings - This study finds no statistically significant impact of these facilities on total employment or average wage per job during this period. There is a statistically meaningful impact of co-working spaces on proprietor’s employment, but the effect is an economically insignificant one-time increase of 2.3 jobs in the typical county, which can be interpreted as shifting employment from traditional employment to proprietorship employment. Originality/value - This is the first empirical estimate of the contribution of modern facility incentives on measures of local economic activity.

Keywords: Business incubator; Makerspace; Co-working space; Regional economic development; O18; O20; L26 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jepppp:jepp-d-18-00013

DOI: 10.1108/JEPP-D-18-00013

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