Can Movie Production Incentives Grow the Economy? Evidence from Georgia and North Carolina

35 Pages Posted: 8 Aug 2019

Date Written: August 4, 2019

Abstract

Most US states have adopted movie production incentives with the intention to stimulate state economic growth through film industry investment and related economic activity. Previous cross-state studies of film incentives have not identified a stimulus effect; however, the zero-sum nature of interstate competition to attract business through targeted incentives complicates the identification of economic effects. If benefits accrue only to the few states offering the greatest incentives, then the impact might not be evident through interstate comparisons. This study uses the synthetic control method to examine the economic impact of relatively large film tax credit and grant subsidies offered by Georgia and North Carolina. Both states experienced lower per capita income than expected after implementing film incentives, indicating that economic benefits did not accrue to the winners of this economic incentives arms race.

Keywords: economic development policy, tax incentives, tax credits, film industry, movie production incentives, synthetic control method

JEL Classification: H25, H71, L82, R11, R38, Z11, Z18

Suggested Citation

Bradbury, John Charles, Can Movie Production Incentives Grow the Economy? Evidence from Georgia and North Carolina (August 4, 2019). Available at SSRN: https://ssrn.com/abstract=3432035 or http://dx.doi.org/10.2139/ssrn.3432035

John Charles Bradbury (Contact Author)

Kennesaw State University ( email )

Dept. of Economics, Finance, and Quant. Analysis
560 Parliament Garden Way NW
Kennesaw, GA 30144
United States

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