How important are market potential and fiscal incentives for firms’ location decisions? We estimate the influence of subsidies and tax breaks on the decisions of firms to relocate or to remain in a certain U.S. county using a structural economic geography model developed in Meurers and Moenius (2018). In a panel data set from 1990 to 2016 for almost 3,000 U.S. counties, the authors find a strong and robust impact of economic geography on firms’ location decisions: The closer a county is to market demand and to the supply of inputs, the more firms locate there. As the model predicts, public investment attracts firms while the local tax burden disincentivizes economic activity, although to a lesser extent. Furthermore, in counties that are closer to economic centers, firms respond less to public investment and tax changes than firms in counties far away from centers. These data, therefore, confirm the predictions of the model regarding the potential effectiveness of regional development policies, in particular for investment tax credits, job creation, and training.

中文翻译：

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市场潜力和财政激励因素影响企业的选址决策：来自美国各县的证据

市场潜力和财政激励措施对公司的选址决策有多重要？我们使用在Meurers和Moenius（2018）中开发的结构性经济地理模型来估计补贴和税收减免对公司决定迁入或留在美国某个县的影响。在1990年至2016年美国近3,000个县的面板数据集中，作者发现经济地理因素对公司的选址决策产生了强大而强劲的影响：一个县越接近市场需求和投入物的供应，公司越多找到那里。正如模型所预测的那样，公共投资吸引了公司，而地方税收负担却抑制了经济活动，尽管程度较小。此外，在距离经济中心较近的县，公司对公共投资和税收变化的反应要比远离中心的县的公司少。因此，这些数据证实了关于区域发展政策的潜在有效性的模型预测，特别是在投资税收抵免，创造就业机会和培训方面。