These two events displaced the participation of African Americans, who represented a majority of the agricultural workforce. World War II saw the end of the complete dominance agriculture once held over the Mississippi, the tripling of wages, and the permanent establishment of industrial, service, and professional sectors in the local economy (Farrell, 2001). Today, the Mississippi Development Authority (MDA), established in the capital, Jackson claims to be a direct extension of the original MIC, and was therefore founded in 1936.
MDA's mission is to "foster a strong state economy and vibrant communities through innovation, leveraging talent and resources to improve the lives of our citizens ("About USA", 2018)." The creation of the Mississippi Film Office in 1973 by Governor Bill Waller also counts as a milestone. While the operation began humbly in the wake of the Second World War, the current Development Authority comprises 17 divisions with specific operational purposes, a team of eight executives and 12 managers. To better understand these implications, I review studies covering tax credit programs in Arkansas and Wisconsin, public financing for sports stadiums, loan subsidies for entrepreneurs, and a case study of the Nissan plant in Madison County, in the heart of Mississippi.
In their analysis, they find no significant relationship between the program and employment at the provincial level. The target of the article is the “Quick Action Closing Fund,” which they cite as encouraging rent-seeking behavior and negative spillovers due to higher infrastructure costs. If a stadium was given a positive meaning, this was actually at the expense of local employment in another part of the city, implying that a transfer of workers had taken place.
According to the 2013 report, an average factory job cost $290,000 with twenty percent of the workforce being temporary workers.
Subsidies
This prize is used exclusively to attract specific companies in certain sectors, with large investments of minimum. Employers can also apply if they meet a capital investment threshold of $150 million from private or federal funding in conjunction with the creation of “1,000 net new jobs,” or alternatively, with the creation of 1,000 net new jobs that provide “125% of pay the annual income”. state wage rate,” according to §57-75-5 of the Mississippi Code. The Mississippi Industry Incentive Revolving Financial Fund was established in 2010 under Mississippi Code §57-1-221 to expedite the renewal process for past award winners through the Department of Treasury.
The “ACE Fund” was established in 2000 under Mississippi Code §57-1-16 and is designed to award large contracts to companies that have competitive bids from other states. The Mississippi Job Protection Act, established under Mississippi Code §57-95-1, provides incentives to industries that have lost jobs to outsourcing. The “Development Infrastructure Grant Program” (DIP), established under Mississippi Code §57-61-36, authorizes a maximum of $150,000 per infrastructure expansion project.
The Economic Development Highway Grant Program was also established under Mississippi Code §57-61-36 and is aimed at job creation and private investment through the construction and improvement of highways. The Rural Impact Fund Grant Program (RIF) established pursuant to Mississippi Code §57-85-1 targets rural communities with less than 10,000 residents, or a county containing less than 30,000 residents. The "Existing Industry Productivity Loan Program" under Mississippi Code §57-93-1 offers firms established in Mississippi for at least two years the opportunity to apply for loan funds for long-term fixed assets.
The "Workforce Training Fund" codified under Mississippi Code §57-1-401 provides funding to Mississippi community colleges, universities, or firms for expenses incurred in training employees who do not qualify for other federal training programs. Perhaps one of the most widely used incentives in Mississippi, the Community Development Block Grant (CDBG) Economic Development Program provides public funds to counties on behalf of businesses to address infrastructure development. This rebate provides 80 percent of potential sales tax revenue for 15 years or until the firm has recouped 30 percent of the total project cost.
The "Movie Rebate Program" provides rebates for payroll, sales tax, rental costs and other "eligible expenses" for movies, television programs, documentaries, commercials, animations. The last major stimulus reported is the Mississippi Investment Tax Credit Program. This award is eligible for Community Development Entities (CDEs) in low census tract areas and act as state tax credits, and allows up to 24% of Qualified Capital Investments as dictated by the Internal Revenue Service. Mississippi Interior and Legislation. Of the approximately 2,500 awards made, Mississippi counties received an average of $353,100 per project over all years observed.
Methodology
As the dominance of the dependent variable increases, confounding factors are less likely to affect the prediction. Symmetry issues for VARs often mean that the response of a variable has the same shape regardless of whether the observed shock is positive or negative. The magnitude of the treatment in VARs is scaled to the impulse response causing shape invariance.
Vector autoregressions are also history independent, meaning their impulse responses do not take into account past values of observations. Finally, the local projection model allows me to avoid the structural problems of vector auto regression. Characteristically, impulse response functions can be estimated equation-by-equation, which makes them useful for panel data sets like the one I use to examine subsidies among counties.
The addition of lagged indicators on coefficients allows the subsequent regressions to account for predictable trends, thus predicting future periods more accurately to obtain the counterfactuals.
Data
Given the already small effects in the original data, I then transformed the variable data into a logarithmic form to create elasticities that are easier to interpret. These records account for annual private employment at the state and national levels for more than 800 industries. All grant information is taken from the Mississippi Development Authority's free publications beginning in fiscal year 2013.
These reports are designed to provide transparency on government spending and provide a summary of all major grant and loan programs for the past three years in a consistent format that includes: a brief description stating the objective for each program, total corporate investment, total incentives spent to date, as well as completed works.
Results
There are seven degrees of freedom after the end of the forecast horizon, indicating limited variation in the results. Reducing total subsidies on total wages in Mississippi is meaningless at the five percent level for the interest rate parameter. 80 percent of the variance in the first three predictions is explained by the coefficient of determination.
With the inclusion of dummy annual variables, the explained variance increases to as much as 87 percent. Similar to the previous regression forecasts, the employment indicator in the private sector is also significant at the one percent level in the first three periods. Excluding the annual dummy variables during the fourth forecast, the R2 term explains only 30 percent of the variability between private employment and these subsidies.
In the last series of forecasts, I again find no significant evidence of a subsidy effect on total employment in Mississippi.
Industry Estimates
Zero falls within the confidence interval, therefore there is no significant effect in the production industry. The transport industry is often targeted for infrastructure spending, which often includes allocations from the DIP and RIF. It often receives funds from the "Existing Industry Productivity Loan Program." I find no significant effects of employment transfers to the agricultural industry after this regression series.
Thus, I find no evidence of a net gain in jobs, or a transfer of employment in my regression analysis.
Estimate of a Multiplier Effect
Conclusion
The courtship process can be as formal as any first meeting in the South: the Governor himself can even make one. With each section of the reports, a dedicated investment total is strategically positioned, calculating expected future employment opportunities, as well as the ratio of government spending to private investment. Studies determine that projects requiring large public investments, such as stadiums, have also shown negligible effects on wages and employment over large periods of time.
This thesis is primarily aimed at isolating an economic effect of the awarded subsidies from the state of Mississippi. This area of future research could involve how the political process of the state engages in the disbursement of public funds and lies waiting to be investigated. To estimate the effect of the reported subsidies, I use impulse response from Jordà's (2005) local area method.
This framework provides a simple model that estimates the dynamic path from wages and employment to changes in subsidies reported across the state. I don't see any significant effects of the $840 million spent on loans and grants on wages and employment in Mississippi. I look first at private wages, then at all wages in the sector, and see no significant results at the five percent level.
Therefore, I conclude that these grants and loans have no significant impact on job creation or wages. The Effect of Subsidizing Firms on Voting Behavior: Evidence from Flemish Elections." European Journal of Government and Economics, vol. Persistence of Industrial Policy Effects: Evidence from Depression-era Mississippi" Drexel University, School of Economics.
The Truth About the Boll Weevil': The Nature of Planter Power in the Mississippi Delta.” Environmental History 14, no. The Impact of the Manufacturing and Agricultural Credit in Wisconsin. Center for Research on the Wisconsin Economy.
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