Sectoral growth patterns at the metropolitan level: An evaluation of economic development incentives

Breandan O'Huallachain, Mark A. Satterthwaite

Research output: Contribution to journalArticle

56 Citations (Scopus)

Abstract

Economic development incentives are much used and expensive, yet information on their effectiveness is scarce. This paper reports a regression analysis of employment growth in 37 disaggregated sectors across U.S. metropolitan areas in the time period 1977-1984. The results indicate that variation in taxes and subsidies are not related significantly to the location of either high-technology manufacturing or most services. Our results suggest, however, that enterprise zones and university research parks, which may be proxies for focused economic development programs, are associated with increased job growth. Nevertheless the strongest determinants of growth are localization and urbanization externalities, along with labor costs and skill factors. We hypothesize that localization economies operate through the reduction of information costs, especially those associated with firms' search behaviors for skilled labor forces.

Original languageEnglish (US)
Pages (from-to)25-58
Number of pages34
JournalJournal of Urban Economics
Volume31
Issue number1
DOIs
StatePublished - 1992

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incentive
economic development
university research
labor costs
employment trend
high technology
evaluation
labor force
subsidy
skilled labor
economics
urbanization
taxes
agglomeration area
regression analysis
manufacturing
determinants
firm
cost
metropolitan area

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

Sectoral growth patterns at the metropolitan level : An evaluation of economic development incentives. / O'Huallachain, Breandan; Satterthwaite, Mark A.

In: Journal of Urban Economics, Vol. 31, No. 1, 1992, p. 25-58.

Research output: Contribution to journalArticle

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