Local Fiscal Policy and Establishment Growth

This applied study examines the effects of local taxes and government spending on the employment growth of 17,172 Maine establishments that were in operation in 1996 and 1999. Empirical results indicate that taxes have a negative effect on an establishment’s three-year employment growth rate, although the tax effects are quite small in magnitude. These results are robust to the omission of establishments located in municipalities that cause group effects in the regression analysis. The negative tax effects are not statistically significant, however, in regressions that correct for sample selection bias related to establishment closures. In general, the empirical findings do not reveal a significant relationship between establishment growth and several types of local government spending.


Issue Date:
2003
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/132246
Published in:
Journal of Regional Analysis and Policy, Volume 33, Issue 1
Total Pages:
24




 Record created 2017-04-01, last modified 2017-08-26

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