

@mastersthesis {6650,
	title = {The effects of taxes and public infrastructure on regional economic development},
	year = {1998},
	note = {9901196},
	school = {Oklahoma State University},
	type = {phdPh.{D}.},
	address = {Ann Arbor},
	abstract = {Scope and method of study. The recent attention given to public infrastructure deterioration has increased the interest of policy makers and researchers in the impact of state and local tax and spending policies on regional economic development. This study examines the relationship between employment growth and state and local public infrastructure capital stock and taxes within the context of a firm location model. Investigating the significance of increases in public infrastructure capital on economic growth in isolation of the tax increases necessary to finance them is not of considerable importance to policy makers. The framework of a firm location model allows the positive effects on economic growth of public infrastructure increases to be compared with the negative effects of the tax increases necessary to finance them. This study uses, with other explanatory variables, state and local public infrastructure capital stock estimates, a new type of data. Measures of business and non-business taxes are constructed and used as explanatory variables. These variables are consistent with the theoretical specification of a firm location model. Estimation procedures are chosen to correct for the problems that have plagued previous empirical studies of the effects of state and local infrastructure and taxes on regional economic development. The previous studies that used regression analysis have assumed that all state and regional fixed effects can be controlled for by intercept dummy variables, assuming that all slopes are the same across states. This study investigates the structural stability of regression models even after the inclusion of intercept dummy variables. Findings and Conclusions. Unlike previous studies that found significant impact of streets/highways and water and sewage public capital stock on economic growth for the mean state of all the states, the results of this study indicate that streets/highways and sewage public infrastructure capital has a positive and statistically significant effect on economic growth in the high growth states, but not in the low growth states. This supports Eberts and Dalenberg (1988) assertion that public infrastructure deterioration in older cities and SMSA{\textquoteright}s has a considerable adverse impact on urban economic growth. The effects of increases of state and local public infrastructure capital on streets and highways on regional economic growth outweigh the negative effects of the tax increases, necessary to finance them, in some of the high growth states. This result suggests that in the long run the net effects of tax increases to finance increases in public infrastructure are likely to be positive for most of the high growth states. Evidence found by the study indicates that firms, when making location decisions, give more weight to interstate, or interjurisdictional, differentials in taxes paid by businesses than to non-business taxes or state total tax revenue. This suggests that raising an additional amount of tax revenue would cause less harm to employment growth if it is made by non-business taxes than by business taxes.},
	keywords = {0501:Economics, Economic development, economics, Public infrastructure, Regional economic development, Social sciences, Taxes},
	url = {http://search.proquest.com/docview/304471007?accountid=14270},
	author = {Monofali, Abbas H}
}
