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Do Movie Production Incentives Generate Economic Development?

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  • John Charles Bradbury

Abstract

Movie production incentives (MPIs) are a popular economic development strategy employed by U.S. states. Film subsidies are intended to encourage external investment into a nascent industry that spills over onto complementary industries to generate economic growth through a multiplier. Despite their widespread use, the positive impact of MPIs on state economies has not been documented, and several states have halted their MPI programs due to high costs and questionable efficacy. This study exploits the staggered implementation, suspension, and elimination of film incentive programs across states to estimate the macroeconomic impact of MPIs. Instrumental variable estimates that permit causal inference do not support the hypothesized positive impacts of film incentives on state economies. (JEL H25, H71, L82, R11, R38, Z11, Z18)

Suggested Citation

  • John Charles Bradbury, 2020. "Do Movie Production Incentives Generate Economic Development?," Contemporary Economic Policy, Western Economic Association International, vol. 38(2), pages 327-342, April.
    • Handle: RePEc:bla:coecpo:v:38:y:2020:i:2:p:327-342
    DOI: 10.1111/coep.12443
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    References listed on IDEAS

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    1. William F. Fox & Matthew N. Murray, 2004. "Do Economic Effects Justify the Use of Fiscal Incentives?," Southern Economic Journal, John Wiley & Sons, vol. 71(1), pages 78-92, July.
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    3. Richard Adkisson, 2013. "Policy Convergence, State Film-Production Incentives, and Employment: A Brief Case Study," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(2), pages 445-454.
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    Cited by:

    1. Scavette, Adam, 2023. "The economic impact of a casino monopoly: Evidence from Atlantic City," Regional Science and Urban Economics, Elsevier, vol. 103(C).
    2. Velma Zahirovic-Herbert & Karen M Gibler, 2022. "The effect of film production studios on housing prices in Atlanta, the Hollywood of the South," Urban Studies, Urban Studies Journal Limited, vol. 59(4), pages 771-788, March.
    3. Rickman, Dan S. & Wang, Hongbo, 2022. "Industry Aggregation and Assessment of State Economic Development from Motion Picture and Television Production Incentives," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 52(1), August.
    4. Dan S. Rickman & Hongbo Wang, 2023. "Creating and maintaining film clusters: Synthetic control method analysis of the enactment and repeal of US state film incentives," Papers in Regional Science, Wiley Blackwell, vol. 102(2), pages 363-392, April.

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    More about this item

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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