Do Targeted Tax Credits Generate Economic Development? Evidence From Movie Production Incentives

By John Charles Bradbury. He is an economics professor at Kennesaw State University.

"Abstract

Most US states offer movie production incentive (MPI) tax credits for the purpose of fostering economic development. The staggered implementation, suspension, and elimination of various incentive programs in the 2000s provides a fertile testing ground for empirical analysis of the economic impact of MPI programs to assess the effectiveness of industry-targeted tax credits on state economies. Econometric analysis using a previously-identified set of robust control variables finds little evidence of positive impacts from MPIs on state economies, though some MPIs are associated film industry growth and size. The findings call into question the standard economic development justification often used to advocate for MPIs and other targeted tax incentives."