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Amenities, Local Conditions, and Fiscal
Determinants of Factor Growth in Rural America By Eric Thompson, George Hammond, and Stephan Weiler |
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Abstract This paper examines how amenities, asset indicators, and fiscal factors
influence the growth in factors of production from 1972 to 1999 in the 466
non-metropolitan labor market areas in the continental United States. In
developing our model of non-metropolitan factor markets, we combine the
emphasis of Brown et al. (2003) on the affect of taxes and public
expenditure policy on labor and capital formation with the emphasis of
Beeson et al. (2001) on the importance of climate and natural features on
localized population growth. We develop our own measure of capital stock in
non-metropolitan areas using data from the Census of Manufacturing for 1967,
1972, 1977, 1982, 1987, and 1992. Results indicate that local taxes
discourage both employment growth and manufacturing capital formation, but
that local public infrastructure investment and the level of local
entrepreneurship encourages employment growth. Amenities such as a favorable
climate and the presence of surface water encourage the growth of
employment, and greater local wealth, as measured by dividend, interest, and
rent income, encourages the formation of manufacturing capital stock.
Results fail to support an “export base” approach for rural economies where
greater manufacturing capital stock encourages greater employment in a
region. Keywords: Regional growth, rural, manufacturing, investment, amenities,
taxes, public infrastructure |
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