Firm Responses to Hiring and Investment Subsidies: Regression Discontinuity Evidence from the California Competes Tax Credit
利用加州竞争税收抵免的断点回归设计，研究发现该补贴促进了企业在加州的就业扩张，且未显著挤占其他州的业务。
Abstract We examine firm responses to state hiring and investment subsidies. We leverage institutional features of the California Competes Tax Credit (CCTC), a large-scale business incentive program that incorporates best practices from prior job creation policies. The CCTC award selection procedure combines formula-based and discretionary components. Leveraging applicant score eligibility cutoffs in a regression discontinuity design and taking advantage of rich longitudinal microdata on establishments and their parent firms, we find that businesses expand employment in California in response to CCTC awards. There is little evidence that these expansions come at the expense of firms’ operations in other states. Our results suggest that targeted and audited hiring and investment subsidies can be effective in promoting local business expansions without inducing significant cross-state displacement effects.