• Medientyp: E-Artikel
  • Titel: Fleeing a Lame Duck: Policy Uncertainty and Manufacturing Investment in US States
  • Beteiligte: Falk, Nathan; Shelton, Cameron A.
  • Erschienen: American Economic Association, 2018
  • Erschienen in: American Economic Journal: Economic Policy, 10 (2018) 4, Seite 135-152
  • Sprache: Englisch
  • DOI: 10.1257/pol.20160365
  • ISSN: 1945-7731; 1945-774X
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  • Beschreibung: It is found that electorally induced policy uncertainty decreases manufacturing investment in US states. In a state with average partisan polarization, the elasticity of election-year investment to a specific measure of policy uncertainty is −0.027. When the incumbent governor is term limited, there is greater uncertainty over the outcome, providing an instrument to demonstrate this effect is causal, not simply coincidental. Moreover, manufacturing investment does not rebound following the election. Rather, own-state uncertainty is associated with a large and significant coincident rise in neighboring states’ investment. These findings suggest that policy uncertainty at the subnational level drives investment to alternate sites. (JEL D25, D72, E22, G31, L60, R11)