Regional subsidies and industrial prospects of lagging regions

Detalhes bibliográficos
Autor(a) principal: Carvalho, Alexandre
Data de Publicação: 2007
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Institucional do FGV (FGV Repositório Digital)
Texto Completo: http://hdl.handle.net/10438/12480
Resumo: Large and sustained differences in economic performance across regions of developing countries have long provided motivation for fiscal incentives designed to encourage firm entry in lagging areas. Empirical evidence in support of these policies has, however, been weak at best. This paper undertakes a direct evaluation of the most prominent fiscal incentive policy in Brazil, the Fundos Constitucionais de Financiamento (Constitutional Funds). In doing so, we exploit valuable features of the Brazilian Ministry of Labor's RAIS data set to address two important elements of firm location decisions that have the potential to bias an assessment of the Funds: (i) firm 'family structure' (in particular, proximity to headquarters for vertically integrated firms), and (ii) unobserved spatial heterogeneity (with the potential to confound the effects of the Funds). We find that the pull of firm headquarters is very strong relative to the Constitutional Funds for vertically integrated firms, but that, with non-parametric controls for time invariant spatial heterogeneity, the Funds provide statistically and economically significant incentives for firms in many of the targeted industries.
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spelling Carvalho, AlexandreEscolas::EPGEFGV2014-11-18T13:41:12Z2014-11-18T13:41:12Z2007-03-12http://hdl.handle.net/10438/12480Large and sustained differences in economic performance across regions of developing countries have long provided motivation for fiscal incentives designed to encourage firm entry in lagging areas. Empirical evidence in support of these policies has, however, been weak at best. This paper undertakes a direct evaluation of the most prominent fiscal incentive policy in Brazil, the Fundos Constitucionais de Financiamento (Constitutional Funds). In doing so, we exploit valuable features of the Brazilian Ministry of Labor's RAIS data set to address two important elements of firm location decisions that have the potential to bias an assessment of the Funds: (i) firm 'family structure' (in particular, proximity to headquarters for vertically integrated firms), and (ii) unobserved spatial heterogeneity (with the potential to confound the effects of the Funds). We find that the pull of firm headquarters is very strong relative to the Constitutional Funds for vertically integrated firms, but that, with non-parametric controls for time invariant spatial heterogeneity, the Funds provide statistically and economically significant incentives for firms in many of the targeted industries.engEscola de Pós-Graduação em Economia da FGVSeminários de pesquisa econômica da EPGETodo cuidado foi dispensado para respeitar os direitos autorais deste trabalho. Entretanto, caso esta obra aqui depositada seja protegida por direitos autorais externos a esta instituição, contamos com a compreensão do autor e solicitamos que o mesmo faça contato através do Fale Conosco para que possamos tomar as providências cabíveisinfo:eu-repo/semantics/openAccessRegional subsidies and industrial prospects of lagging regionsinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleEconomiaDesenvolvimento regional - BrasilIncentivos fiscais - Brasilreponame:Repositório Institucional do FGV (FGV Repositório Digital)instname:Fundação Getulio Vargas (FGV)instacron:FGVORIGINAL2186.pdf2186.pdfapplication/pdf152670https://repositorio.fgv.br/bitstreams/91302507-ba17-472a-8cd6-116ee8296e4f/download4bde964f2bfac733f9c3b0607f193243MD51LICENSElicense.txtlicense.txttext/plain; charset=utf-84707https://repositorio.fgv.br/bitstreams/a9856114-a637-4e77-8172-819375472fa0/downloaddfb340242cced38a6cca06c627998fa1MD52TEXT2186.pdf.txt2186.pdf.txtExtracted 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dc.title.eng.fl_str_mv Regional subsidies and industrial prospects of lagging regions
title Regional subsidies and industrial prospects of lagging regions
spellingShingle Regional subsidies and industrial prospects of lagging regions
Carvalho, Alexandre
Economia
Desenvolvimento regional - Brasil
Incentivos fiscais - Brasil
title_short Regional subsidies and industrial prospects of lagging regions
title_full Regional subsidies and industrial prospects of lagging regions
title_fullStr Regional subsidies and industrial prospects of lagging regions
title_full_unstemmed Regional subsidies and industrial prospects of lagging regions
title_sort Regional subsidies and industrial prospects of lagging regions
author Carvalho, Alexandre
author_facet Carvalho, Alexandre
author_role author
dc.contributor.unidadefgv.por.fl_str_mv Escolas::EPGE
dc.contributor.affiliation.none.fl_str_mv FGV
dc.contributor.author.fl_str_mv Carvalho, Alexandre
dc.subject.area.por.fl_str_mv Economia
topic Economia
Desenvolvimento regional - Brasil
Incentivos fiscais - Brasil
dc.subject.bibliodata.por.fl_str_mv Desenvolvimento regional - Brasil
Incentivos fiscais - Brasil
description Large and sustained differences in economic performance across regions of developing countries have long provided motivation for fiscal incentives designed to encourage firm entry in lagging areas. Empirical evidence in support of these policies has, however, been weak at best. This paper undertakes a direct evaluation of the most prominent fiscal incentive policy in Brazil, the Fundos Constitucionais de Financiamento (Constitutional Funds). In doing so, we exploit valuable features of the Brazilian Ministry of Labor's RAIS data set to address two important elements of firm location decisions that have the potential to bias an assessment of the Funds: (i) firm 'family structure' (in particular, proximity to headquarters for vertically integrated firms), and (ii) unobserved spatial heterogeneity (with the potential to confound the effects of the Funds). We find that the pull of firm headquarters is very strong relative to the Constitutional Funds for vertically integrated firms, but that, with non-parametric controls for time invariant spatial heterogeneity, the Funds provide statistically and economically significant incentives for firms in many of the targeted industries.
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dc.date.issued.fl_str_mv 2007-03-12
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