Regional Incentives and Industrial Location in Puerto Rico

40 Pages Posted: 17 Dec 1997

See all articles by Paulo Guimarães

Paulo Guimarães

University of Minho - Department of Economics

Robert J. Rolfe

University of South Carolina - Department of Accounting

Douglas P. Woodward

University of South Carolina

Date Written: December 1996

Abstract

This study uses nested logit to estimate the influence of industrial incentives on the location of manufacturing plants in Puerto Rico. Puerto Rican laws grant generous tax exemptions and provide other incentives for investments in less-developed, peripheral regions of the island. Focusing on Puerto Rico allowed us to isolate and test location factors in a closed environment where 76 municipalities received a development zone designation and competed directly against one another for new plants. Simulations indicated that the regional incentive policy reallocated relatively few of the greenfield investments from the congested core to the periphery of the island.

JEL Classification: L11, L52, L60, R30, R58

Suggested Citation

de Freitas Guimarães, Paulo and Rolfe, Robert J. and Woodward, Douglas P., Regional Incentives and Industrial Location in Puerto Rico (December 1996). Available at SSRN: https://ssrn.com/abstract=41215 or http://dx.doi.org/10.2139/ssrn.41215

Paulo De Freitas Guimarães

University of Minho - Department of Economics

Braga 4710-057
Portugal
+351 53 604215 (Phone)

Robert J. Rolfe

University of South Carolina - Department of Accounting ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States
803-777-2641 (Phone)

Douglas P. Woodward (Contact Author)

University of South Carolina ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States
803-777-2510 (Phone)
803-777-9344 (Fax)

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