“…There are several theoretical motivations for using spatially targeted incentives to encourage economic development and steer investment toward blighted or disadvantaged areas, including the presence of place‐based physical disamenities, general social problems affecting an area which impose site‐specific costs on firms (Bartik, , ; Greenbaum & Tita, ; Hammermesh, ), increased productivity through the creation of unrealized agglomeration economies (Eberts & McMillen, ; Malpezzi, Seah, & Shilling, ), and the prevention of negative agglomeration economies due to firm exit of an area, among other rationales. The cost of remedying these problems may be beyond the ability of any single firm due to issues of free ridership, with the resulting distribution of economic activity and firm location rational from an individual firm's perspective but suboptimal for an entire industry or urban area.…”