Determinants of Economic Development Incentives Offered by States: A Test of the Arms Race Hypothesis

Authors

Mark A. Jenn, Marquette University
Farrokh Nourzad, Marquette UniversityFollow

Document Type

Article

Language

eng

Format of Original

16 p.

Publication Date

Summer 1996

Publisher

Southern Regional Science Association

Source Publication

Review of Regional Studies

Source ISSN

0048-749X

Abstract

This paper tests the "arms race" hypothesis, which postulates that states tend to increase their incentive offerings to new firms if such incentive programs are in use in other states that are perceived to be direct competitors. Using a pooled time-series/cross-section sample of twelve states covering the period from 1969 through 1985 and a model that controls for the effects of various economic and political factors, we find strong support for the "arms race" hypothesis. This result is robust to the alternative specifications of the incentive offerings and different measures of the degree of competition among states.

Comments

Published version. Review of Regional Studies, Vol. 26, No. 1 (Summer 1996): 1-16. DOI. © 1996 Southern Regional Science Association. Used with permission.

Recommended Citation

Jenn, Mark A. and Nourzad, Farrokh, "Determinants of Economic Development Incentives Offered by States: A Test of the Arms Race Hypothesis" (1996). Economics Faculty Research and Publications. 162.
https://epublications.marquette.edu/econ_fac/162