The Political Economy of Targeted Economic Incentives

Mitchell, Matthew D.; Sutter, Daniel; Eastman, Scott

doi:10.52324/001c.8003

Cited by 7 publications

(7 citation statements)

References 16 publications

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“…Little work has been undertaken on the specific impacts of development incentives on entrepreneurial activity, which is the primary issue our statistical tests will explore. Mitchell et al (2018) and Bundrick and Snyder (2018) provide two of the most recent reviews of the literature on incentives [3]. The former contains only one mention of the word "entrepreneur" (or any related words such as "entrepreneurial" and "entrepreneurship").…”

Section: Related Literaturementioning

confidence: 99%

Targeted state economic development incentives and entrepreneurship

Tuszynski

Stansel

2018

JEPP

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Purpose The purpose of this paper is to examine the relationship between state economic development incentives programs and entrepreneurial activity. Design/methodology/approach The authors use panel data and a fixed-effects model to examine the determinants of five measures of entrepreneurial activity. To measure state economic development incentives programs, they use a new and substantially improved data set from Bartik (2017). They also include a measure for economic freedom, the Fraser Institute’s Economic Freedom of North America index. Findings The authors find a robustly negative relationship between development incentives and patent activity. They find some evidence that incentives are negatively associated with small business establishments (<10 employees) as a percentage of total establishments but positively associated with the large business establishment (>500 employees) share. They also find evidence of a positive relationship between economic freedom and both patent activity and net business formation. Research limitations/implications The results imply that economic development incentive programs are unlikely to increase entrepreneurial activity and may decrease it. They also imply increased economic freedom (lower taxes, lower spending, and lower governmental restrictions on labor markets) may increase entrepreneurial activity. Originality/value To the authors’ knowledge, this paper provides the first examination of the relationship between development incentives and entrepreneurial activity that utilizes Bartik (2017), a new vastly improved data set of state economic development incentive programs. The paper also contributes to the literature on the relationship between economic freedom and entrepreneurial activity.

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Section: Related Literaturementioning

confidence: 99%

Targeted state economic development incentives and entrepreneurship

Tuszynski

Stansel

2018

JEPP

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“…Skinner's principle of reinforcement led to the incentive theory of motivation, which highlighted the importance of incentives as the primary motivation for action (Skinner 1957). Since then, there have been numerous papers on economic incentives with respect to social preferences (Fehr, Fischbacher 2002, Bowles, Hwang 2008 and the field of regional economics (Bartik 2018, Mitchell et al 2018). The Bitcoin network is a free market within which the network operators are economically incentivised to work together on maintaining the network while competing for a financial reward.…”

Section: Incentivisation Frameworkmentioning

confidence: 99%

Blockchain-Based Welfare Distribution Model for Digital Inclusivity

Tartan

2023

REGION

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An unprecedented rate of technological advancement, compounded by the COVID-19 pandemic, has expedited our transition to a fully digitalised society. Traditionally, digital inclusion focuses on an individual's ability to connect to and access information from the internet. The adoption of novel technologies such as artificial intelligence and blockchain is little distinguished in the literature from internet accessibility. While these digital solutions present novel opportunities, they may also perpetuate or exacerbate the existing hurdles faced by digitally excluded localities. However, these technologies could also be used to tackle the digital divide. Inspired by the design of Bitcoin, the current study offers a conceptual blockchain-based welfare model that adopts a two-pronged approach to enable the fair distribution of capital and resource allocation across the UK regions. The model offers transparency over institutional processes and improves their trustworthiness while preserving privacy. At the community level, the model assumes the application of economic incentives in order to promote digital inclusivity and stimulate cooperation and competition within local cultures. By mobilising both public institutions and communities, such a holistic model would assist the flow of information between the supply and demand side of the regional economy. This approach may not only help to dissolve the welfare losses arising from the digital divide, but also improve social well-being in all regions.

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“…The ever-evolving topic of business relocation and expansion decisions have been widely discussed in the literature (Stallmann and Deller, 2011;Kolko et al, 2013). For example, a recent issue of the Review of Regional Studies (volume 48, issue 1; 2018) presented multiple papers which discussed the history of providing incentives and provided insights on their efficacy from empirical recent studies (Bryne, 2017;Bundrick and Snyder, 2018;Calcagno and Hefner, 2018;Mitchell et al, 2018). These studies, and indeed much of the previous literature, find that tax incentives are not major factors in business relocation or expansion c Southern Regional Science Association 2020.…”

Section: Background and Literature Reviewmentioning

confidence: 99%

Business Climate in the Eye of the Employer

Salaghe¹,

Watson²,

Hildebrandt³

et al. 2020

Review of Regional Studies

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What constitutes a "good business climate" is often couched in monolithic and diametrically opposed terms of low taxes versus high public services. However, there is likely considerable heterogeneity across firms in their preferences for the trade-off between higher taxes and the public services they provide. Using a novel primary data set of firm expansion and relocation decisions, this analysis investigates how firms in relatively high-paying sectors express their preferences for a variety of local "business climate" attributes relative to firms in lower-paying sectors. The findings show evidence that firms in low-wage sectors view a "good business climate" differently than firms in high-wage sectors.

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The Political Economy of Targeted Economic Incentives

Cited by 7 publications

References 16 publications

Targeted state economic development incentives and entrepreneurship

Targeted state economic development incentives and entrepreneurship

Blockchain-Based Welfare Distribution Model for Digital Inclusivity

Business Climate in the Eye of the Employer

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