Header

UZH-Logo

Maintenance Infos

A quantitative analysis of subsidy competition in the U.S.


Ossa, Ralph (2015). A quantitative analysis of subsidy competition in the U.S. NBER Working Papers 20975, National Bureau of Economic Research.

Abstract

What motivates regional governments to subsidize firm relocations and what are the implications of the subsidy competition among them? In this paper, I address these questions using a quantitative economic geography model which I calibrate to U.S. states. I show that states have strong incentives to subsidize firm relocations in order to gain at the expense of other states. I also show that subsidy competition creates large distortions so that there is much to gain from a cooperative approach. Overall, I find that manufacturing real income can be up to 3.9 percent higher if states stop competing over firms.

Abstract

What motivates regional governments to subsidize firm relocations and what are the implications of the subsidy competition among them? In this paper, I address these questions using a quantitative economic geography model which I calibrate to U.S. states. I show that states have strong incentives to subsidize firm relocations in order to gain at the expense of other states. I also show that subsidy competition creates large distortions so that there is much to gain from a cooperative approach. Overall, I find that manufacturing real income can be up to 3.9 percent higher if states stop competing over firms.

Statistics

Downloads

14 downloads since deposited on 22 Mar 2017
14 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:F12, F13, R12, R58
Language:English
Date:February 2015
Deposited On:22 Mar 2017 13:47
Last Modified:03 Jun 2017 13:26
Series Name:NBER Working Papers
Number of Pages:56
Official URL:http://www.nber.org/papers/w20975.pdf
Related URLs:http://www.nber.org/papers/w20975

Download

Preview Icon on Download
Content: Published Version
Filetype: PDF - Registered users only
Size: 865kB
Preview Icon on Download
Preview
Content: Presentation
Filetype: PDF (Slides)
Size: 1MB

TrendTerms

TrendTerms displays relevant terms of the abstract of this publication and related documents on a map. The terms and their relations were extracted from ZORA using word statistics. Their timelines are taken from ZORA as well. The bubble size of a term is proportional to the number of documents where the term occurs. Red, orange, yellow and green colors are used for terms that occur in the current document; red indicates high interlinkedness of a term with other terms, orange, yellow and green decreasing interlinkedness. Blue is used for terms that have a relation with the terms in this document, but occur in other documents.
You can navigate and zoom the map. Mouse-hovering a term displays its timeline, clicking it yields the associated documents.

Author Collaborations