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The Impact Of Infrastructure Spending On New Business Formation: The Importance Of State Economic Development Spending

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  • Ernest P. Goss

    (Creighton University)

Abstract

Results from this study suggest that states. in order to encourage new business formation and to compensate for unfavorable economic conditions, have budgeted more funds to support economic development agency activities. It is concluded that past studies, by failing to control for state economic development agency spending in estimated regression equations, have underestimated the impact of infrastructure spending and taxes on the formation of new businesses. Findings indicate that only after controlling for economic development agency spending do infrastructure spending and taxes enter the estimated regression equation with statistically significant coefficients and with the expected signs.

Suggested Citation

  • Ernest P. Goss, 1994. "The Impact Of Infrastructure Spending On New Business Formation: The Importance Of State Economic Development Spending," The Review of Regional Studies, Southern Regional Science Association, vol. 24(3), pages 265-279, Winter.
    • Handle: RePEc:rre:publsh:v24:y:1994:i:3:p:265-279
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    References listed on IDEAS

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    1. Kevin T. Duffy-Deno & Randall W. Eberts, 1996. "Public Infrastructure and Regional Economic Development: A Simultaneous Equations Approach," Book chapters authored by Upjohn Institute researchers, in: Niles Hansen & Kenneth J. Button & Peter Nijkamp (ed.),Regional Policy and Regional Integration, pages 295-309, W.E. Upjohn Institute for Employment Research.
    2. Biehl, Dieter, 1980. "Determinants of Regional Disparities and the Role of Public Finance," Public Finance = Finances publiques, , vol. 35(1), pages 45-71.
    3. William F. Fox & Tim R. Smith, 1990. "Economic development programs for states in the 1990s," Economic Review, Federal Reserve Bank of Kansas City, vol. 75(Jul), pages 25-35.
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    Cited by:

    1. Lee, Yoonsoo, 2008. "Geographic redistribution of US manufacturing and the role of state development policy," Journal of Urban Economics, Elsevier, vol. 64(2), pages 436-450, September.
    2. Peter S. Fisher, 1997. "Tax and spending incentives and enterprise zones," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 109-138.
    3. Richard M. Vogel, 2000. "Relocation Subsidies: Regional Growth Policy or Corporate Welfare?," Review of Radical Political Economics, Union for Radical Political Economics, vol. 32(3), pages 437-447, September.
    4. Jed Kolko & David Neumark, 2008. "Changes In The Location Of Employment And Ownership: Evidence From California," Journal of Regional Science, Wiley Blackwell, vol. 48(4), pages 717-744, October.
    5. Eric Thompson, 2005. "If You Build It, Will They Come?," Technical Reports 050513, Brandmeyer Center for Applied Economics, School of Business, University of Kansas.

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