Cash for Corporations? The Effects of State Incentives on Economic Development

The relationship between corporate incentives such as tax cuts and economic benefits has long been hotly debated in political circles. This study analyzes 6 different corporate incentives across 33 states from 2005 to 2015.... [ view full abstract ]

The relationship between corporate incentives such as tax cuts and economic benefits has long been hotly debated in political circles. This study analyzes 6 different corporate incentives across 33 states from 2005 to 2015. Using a difference-in-differences approach, I find that among the incentives that are statistically significant, nearly all correlate with negative short-term economic outcomes. However, when isolating effects on specific industries, there exist positive, statistically significant short-term results on economic outcomes which may better facilitate informed policy decisions.