Bidding for Firms
分析政府为吸引企业而提供投资激励的竞争现象，认为当公共服务平均成本定价导致边际成本低于税收时，补贴可促进产业高效选址，而非零和博弈。
Recently, Toyota sought a plant location in the United States. The $800-million plant will employ 3000 workers, and numerous states offered Toyota generous investment incentives, hoping this would induce Toyota to select their state. The Commonwealth of Kentucky won this competition, but the price was high: the present value of the payments exceeds $125 million. The payment of investment incentives for the Toyota plant is not unique. In 1976 Pennsylvania paid $75 million to attract a Volkswagen plan,; Nissan, Honda, and Mazda received generous investment incentives when locating plants in the United States. And this bidding is not limited to states. To attract the headquarters of the Presbyterian Church (USA), with its 1300 jobs and $38 million annual payroll, civic leaders in Louisville, Kentucky, offered the church a warehouse and $6.2 million for renovation of the structure, bidding the church away from Kansas City, Missouri.' In this paper, we contend that this competition may result from the average cost pricing of publicly provided goods and services.2 When the marginal cost of providing a firm and its workers with public services is less than the tax revenue they generate, a government may offer the firm subsidies that reduce the distortions the average cost pricing of the public service creates. Thus, this competition for industry is not a zero-sum game where the subsidies are only transfers from the government to the firm. Rather, these subsidies may facilitate the efficient location of industry.