A quantitative analysis of subsidy competition in the US q

• 成果类型: Article
• 署名作者: Ferrari, Alessandro; Ossa, Ralph
• 署名单位: University of Zurich; University of Zurich; University of Zurich
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2023.104919
• 发表日期: 2023
• 关键词: Optimal subsidies; Subsidy competition; location choice

摘要

We use a quantitative economic geography model to explore subsidy competition among U.S. states. We ask what motivates state governments to subsidize firm relocations and quantify how strong their incentives are. We also characterize fully non-cooperative and cooperative subsidy choices and assess how far away we are from these extremes. We find that states have strong incentives to subsidize firm relocations in order to gain at the expense of other states. We also find that observed subsidies are closer to cooperative than non-cooperative subsidies but the potential losses from an escalation of subsidy competition are large. CO 2023 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license(http://creativecommons.org/licenses/by/4.0/).