Heterogeneous Effects of State Enterprise Zone Programs in the Shorter Run and Longer Run

The authors take up two questions that have not been explored in research on enterprise zones. First, does a considerably longer-run perspective on the effects of state enterprise zones lead to different answers? And second, are there heterogeneous effects of enterprise zones that depend on the set of incentives these programs offer, which can vary widely? The results indicate that whether state enterprise zone programs were observed through a longer-term lens, or through the lens of program heterogeneity, the authors generally did not find any consistent indication of beneficial effects of state enterprise zone programs; if anything, the longer-run effects are negative. The lack of positive effects is consistent with most of the prior evidence that focuses on effects that are short term and homogeneous.

Do Enterprise Zones have a role to play in delivering a place-based industrial strategy?

We examine the body of evidence on Enterprise Zone policy with the objective of assessing its role in broader place-based industrial strategy. We conduct an extensive review, consolidate the empirical evidence into one place and examine it according to economic impact by zone type. We identify two gaps in the empirical knowledge that are systematically addressed through new research on several US Enterprise Zones to gain new evidence on their economic additionality. The article concludes by considering other, hitherto poorly explored, pathways by which zones may help an area to adapt to change and embrace longer-term economic futures.