The Effects of Regional Tax Credits on Regional Investment: In the Case of the Investment Tax Credit in Nebraska

• 영문명: The Effects of Regional Tax Credits on Regional Investment: In the Case of the Investment Tax Credit in Nebraska
• 발행기관: 한국재정학회(구 한국재정·공공경제학회)
• 저자명: Iksoo Cho
• 간행물 정보: 『공공경제』공공경제 제8권 제2호, 175~199쪽, 전체 25쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2003.11.01

영문 초록

This paper investigates the effects of regional tax incentives, specifically the Nebraska state investment tax credit, on the growth of investment in the Nebraska manufacturing industry through the estimation of a capital stock series in the Nebraska manufacturing sector covering the 1977-2000 period. Using the classical cost of capital model, we found that lagged impacts on state investment behavior were not significant, and that the elasticity of investment to tax policy is relatively small. Correcting for measurementerror in the tax term using the tax variables of other states, instrumental variable estimates showed significant effects of tax changes, -1.18 in manufacturing equipment and -1.29 in manufacturing structures. The results suggest that Nebraska tax policy is effective, but most of the effects are crowded out by tax policy competition from other states.

목차

Abstract

Ⅰ. Introduction

Ⅱ. Model

Ⅲ. Data

Ⅳ. Empirical Results

V. Conclusion

Appendix

References