Do entrepreneur-focused facility incentives create economic impacts? Evidence from Indiana

Michael Hicks (Ball State University, Muncie, Indiana, USA)
Dagney G. Faulk (Center for Business and Economic Research, Ball State University, Muncie, Indiana, USA)

Journal of Entrepreneurship and Public Policy

ISSN: 2045-2101

Publication date: 3 September 2018

Abstract

Purpose

As a component of a benefit-cost analysis into the efficacy of publicly funded facility incentives, the purpose of this paper is to examine the county-wide impact of business incubators, makerspaces and co-working spaces on employment, proprietor’s employment and the average wage per job. The period under analysis is 1971 through 2015 across Indiana’s 92 counties.

Design/methodology/approach

Using a unique data set on facility incentives in Indiana, a spatial panel model, which includes a unique identification strategy to account for underlying conditions identified as a source of incubator success in earlier studies, is developed.

Findings

This study finds no statistically significant impact of these facilities on total employment or average wage per job during this period. There is a statistically meaningful impact of co-working spaces on proprietor’s employment, but the effect is an economically insignificant one-time increase of 2.3 jobs in the typical county, which can be interpreted as shifting employment from traditional employment to proprietorship employment.

Originality/value

This is the first empirical estimate of the contribution of modern facility incentives on measures of local economic activity.

Keywords

Citation

Michael Hicks and Dagney G. Faulk (2018) "Do entrepreneur-focused facility incentives create economic impacts? Evidence from Indiana", Journal of Entrepreneurship and Public Policy, Vol. 7 No. 3, pp. 222-234

Download as .RIS

DOI

: https://doi.org/10.1108/JEPP-D-18-00013

Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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