Does Pennsylvania’S Redevelopment Assistance Capital Program Develop its Economy?

20 Pages Posted: 7 Jun 2018

See all articles by Adam Millsap

Adam Millsap

Florida State University - Department of Economics; George Mason University - Mercatus Center

Date Written: 09/03/2015

Abstract

Several states administer grant programs that provide funding to businesses that relocate to the state or expand existing operations within the state. This study analyzes one such program administered by Pennsylvania, the Redevelopment Assistance Capital Program (RACP). Over the life of the program nearly half the grants awarded have gone to the two most populous counties in Pennsylvania, Allegheny and Philadelphia. Using grant data from 2010, I find that RACP grants do have a small effect on subsequent employment growth at the county level. However, this result does not reflect net employment growth at the state level. Additional evidence and economic theory are used to show that grant programs like the RACP spatially and intertemporally reallocate economic activity rather than create long-term economic growth.

Suggested Citation

Millsap, Adam, Does Pennsylvania’S Redevelopment Assistance Capital Program Develop its Economy? (09/03/2015). MERCATUS RESEARCH. Available at SSRN: https://ssrn.com/abstract=3191276 or http://dx.doi.org/10.2139/ssrn.3191276

Adam Millsap (Contact Author)

Florida State University - Department of Economics ( email )

288 Bellamy Building
Tallahassee, FL 30306-2180
United States

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

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