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Author: Guido de Blasio
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Since the second half of the '90s, investment incentives channeled through the Law 488 have represented the main policy instrument for reducing territorial disparities in Italy. From 1996 to 2003, the total amount of funds distributed to industrial firms has accounted for 16 billions of Euro involving 27,846 financed projects mainly in the southern regions. The Law 488 allows firms willing to invest in lagged areas to receive a public subsidy that covers a fraction of the investment outlays. The incentives are assigned through competitive auctions according to pre-determined specific criteria, such as the proportion of own funds invested in the project; the number of jobs involved and the proportion of assistance sought. This paper aims at evaluating the impact of Law 488 subsidies on firms' investment. We employ a linked dataset that matches for all the firms that have applied for the grants - both subsidized firms and firms with rejected applications - the features of the Law 488 intervention with financial account data that covers both pre-intervention and post-intervention periods. The focus is to evaluate whether the Law 488 made it possible investments that otherwise would not have been done. In doing so, we compare the investment performance of subsidized firms with that of the firms that applied for the grants but were not financed. We analyze the extent to which investments have been triggered by intertemporal substitution (firms could have anticipated investment projects originally planned for the post-intervention period to take advantage of the incentives). Moreover, we study the role of cross-sectional substitution (subsidized firms could have taken some of the investment opportunities that non-subsidized firms would have got in absence of the incentives). We find that financed firms have substantially increased their investments when compared with the pool of rejected application firms. We also find evidence of intertemporal substitution: financed firms slow down significantly their investment activity in the years following the program. Finally, the impact of the L488 is more pronounced when the size of the market where the firms compete is small or when the firms are close as for their industrial distance, so to suggest that financed firms displace their non-financed competitors.
Author: Guido de Blasio
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Since the second half of the '90s, investment incentives channeled through the Law 488 have represented the main policy instrument for reducing territorial disparities in Italy. From 1996 to 2003, the total amount of funds distributed to industrial firms has accounted for 16 billions of Euro involving 27,846 financed projects mainly in the southern regions. The Law 488 allows firms willing to invest in lagged areas to receive a public subsidy that covers a fraction of the investment outlays. The incentives are assigned through competitive auctions according to pre-determined specific criteria, such as the proportion of own funds invested in the project; the number of jobs involved and the proportion of assistance sought. This paper aims at evaluating the impact of Law 488 subsidies on firms' investment. We employ a linked dataset that matches for all the firms that have applied for the grants - both subsidized firms and firms with rejected applications - the features of the Law 488 intervention with financial account data that covers both pre-intervention and post-intervention periods. The focus is to evaluate whether the Law 488 made it possible investments that otherwise would not have been done. In doing so, we compare the investment performance of subsidized firms with that of the firms that applied for the grants but were not financed. We analyze the extent to which investments have been triggered by intertemporal substitution (firms could have anticipated investment projects originally planned for the post-intervention period to take advantage of the incentives). Moreover, we study the role of cross-sectional substitution (subsidized firms could have taken some of the investment opportunities that non-subsidized firms would have got in absence of the incentives). We find that financed firms have substantially increased their investments when compared with the pool of rejected application firms. We also find evidence of intertemporal substitution: financed firms slow down significantly their investment activity in the years following the program. Finally, the impact of the L488 is more pronounced when the size of the market where the firms compete is small or when the firms are close as for their industrial distance, so to suggest that financed firms displace their non-financed competitors.
Author: Ana Teresa Tavares-Lehmann
Publisher: Columbia University Press
ISBN: 0231541643
Category : Business & Economics
Languages : en
Pages : 369
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Book Description
Governments often use direct subsidies or tax credits to encourage investment and promote economic growth and other development objectives. Properly designed and implemented, these incentives can advance a wide range of policy objectives (increasing employment, promoting sustainability, and reducing inequality). Yet since design and implementation are complicated, incentives have been associated with rent-seeking and wasteful public spending. This collection illustrates the different types and uses of these initiatives worldwide and examines the institutional steps that extend their value. By combining economic analysis with development impacts, regulatory issues, and policy options, these essays show not only how to increase the mobility of capital so that cities, states, nations, and regions can better attract, direct, and retain investments but also how to craft policy and compromise to ensure incentives endure.
Author: Christian Conroy
Publisher:
ISBN:
Category : Political planning
Languages : en
Pages : 112
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Book Description
Economic development scholars remain divided over whether economic incentives designed to attract businesses to a locality ultimately promote job growth, higher wages and economic development or just give away taxpayer dollars. While some research has found that economic incentives may nudge a company to choose one location over a similar location, others have argued that companies make location decisions based on strategic considerations like human capital and supply chains, and not based on economic incentives. At the same time, even if companies are choosing to locate to a particular locality based on an economic incentive package, it is not clear that the growth they bring is enough to compensate for the loss of tax revenue. In this paper we evaluate the impact of five different types of state-level economic incentives on GDP growth. We use a novel Panel Database on Incentives and Taxes established by the W.E. Upjohn Institute for Employment Research that contains data on marginal business taxes and business incentives for 45 industries in 47 cities in 33 states collected from 1990 to 2015. Using several estimation strategies, including short and long term two-way fixed effects regression modeling and propensity score stratification, we find that economic incentives in the aggregate have a positive impact on state-industry GDP growth but the effects differ across economic incentive types.
Author: Timothy J. Bartik
Publisher: W.E. Upjohn Institute
ISBN: 0880996684
Category : Political Science
Languages : en
Pages : 180
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Bartik provides a clear and concise overview of how state and local governments employ economic development incentives in order to lure companies to set up shop—and provide new jobs—in needy local labor markets. He shows that many such incentive offers are wasteful and he provides guidance, based on decades of research, on how to improve these programs.
Author: Bulman, A., Cordes, K.Y., Mehranvar, L., Merrill, E., Fiedler, Y.
Publisher: Food & Agriculture Org.
ISBN: 9251341672
Category : Technology & Engineering
Languages : en
Pages : 124
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Book Description
Increased investment in agriculture and food systems—from both the private and public sectors—is critical to enhance food security and nutrition, reduce poverty, and adapt to climate change. To generate sustainable benefits, this investment must be responsible. What role should investment incentives play in encouraging such investment? This Guide helps to answer that question. Specifically, the Guide provides policymakers and government technical staff with guidance on how investment incentives can be used (and how they should not be used) to enhance responsible investment in agriculture and food systems. The Guide provides an overview of responsible investment in agriculture and food systems; examines common types of incentives; offers general considerations on how incentives can be used; and discusses how to plan for, design, monitor, and evaluate investment incentives for responsible investment in agriculture and food systems.
Author: Kenneth E. Poole
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 158
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Author: Massimo Florio
Publisher: Edward Elgar Publishing
ISBN: 1783479116
Category : Business & Economics
Languages : en
Pages : 353
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Book Description
This book provides an authoritative contribution to applied cost_benefit analysis (CBA) and other evaluation methods in the context of the regional policy of the European Union. Through the use of Structural Funds and other financial and regulatory mec
Author: J. B. Bracewell-Milnes
Publisher: Springer
ISBN: 9789020004991
Category : Business & Economics
Languages : en
Pages : 144
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Book Description
Modern society cannot function without a high level of investment, just as it cannot function without a high level of taxation (or its equivalent in communist countries). Both investment and taxation (as a source of government revenue) are important for the level of production and employment. No wonder then that governments are faced with an increasing dilemma between higher taxation on the one hand and the need for stimulating investment by tax reductions or allowances on the other. Related to this is the choice between a market economy which is as free as possible and detailed governmental measures for monitoring and steering investments, not only with the intention to promote economic growth but to further a nu mb er of other social interests as weil. This is to some extent a political issue but the decisions it involves should still be based on sound economic facts and considerations. In many countries one of the important instruments for stimulating and steering investment is the introduction oi\modification of investment incentives within the framework of the tax system. The present book gives a lot of information on this subject. It endeavours to create a conceptual order in the somewhat chaotic multitude of incentives practised by the main industrial countries and studies their economic effects. The authors are weil equipped to do this because they were c10sely involved in the study on this subject made by Erasmus U niversity Rotterdam at the request of the Common Market Com mission.
Author: Robin Boadway
Publisher:
ISBN:
Category :
Languages : en
Pages : 123
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Book Description
The authors contend that in evaluating and designing investment incentives in developing economies, analysts should consider their effect on: the marginal effective tax rate (METR). Even simple tax incentives can perversely affect the METR. Many schemes have relatively generous write-offs to begin with, so generous that a negative marginal effective tax rate is not uncommon. In these circumstances, tax rate reductions (including tax holidays) can discourage investment. Investment tax credits are more likely to be effective. Loss firms. Incentives that do not have generous loss-offsetting or refundability provisions will be of limited use to firms likely to suffer losses (including small growing firms and firms in risky environments). Cash flows. Incentives that improve firms' cash flows may be more effective than those that do not. Refundability may be important here. Simply adopting cash-flow costing principles with refundability may be more effective than reducing tax rates. Foreign-owned firms. If the value of a tax incentive is fully offset by reduced credits for foreign taxes, the incentive effect will probably be minimal. Capital allocation among assets. Some measures favor short- over long-lived capital, machinery over inventory, some industries over others. Incentives that encourage investment selectively may cause distortions in the way capital is allocated. Other factors to be considered in designing tax incentives: inflation, which is typically high in developing economies. Incentives should offset the effects of inflation; tax evasion, a common problem in developing countries; technology transfer; the fulfillment of social, environmental, and regional non-economic objectives; the effects on firms' organization (do the incentives encourage mergers, takeovers, or bankruptcy?).
Author: Kenneth P. Thomas
Publisher:
ISBN: 9781894784092
Category : Capital investments
Languages : en
Pages : 70
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