Data and Code for: Direct and Indirect Effects of Investment Tax Incentives

Principal Investigator(s):  View help for Principal Investigator(s) Adrian Lerche, Institute for Employment Research (IAB) and IZA

Version:  View help for Version V1

Name File Type Size Last Modified
  ado 04/07/2025 06:40:AM
  log 04/07/2025 06:40:AM
  output 04/07/2025 06:40:AM
  prog 06/17/2025 07:54:AM
  rawdata 04/07/2025 06:40:AM
  tempdata 04/07/2025 06:40:AM
  transfer 04/07/2025 06:40:AM
Codebook.xlsx application/vnd.openxmlformats-officedocument.spreadsheetml.sheet 90.3 KB 07/04/2025 07:07:AM
LICENSE.txt text/plain 17.1 KB 04/07/2025 01:05:AM
README.pdf application/pdf 325.7 KB 07/04/2025 07:27:AM

Project Citation: 

Lerche, Adrian. Data and Code for: Direct and Indirect Effects of Investment Tax Incentives. Nashville, TN: American Economic Association [publisher], 2025. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2025-07-14. https://doi.org/10.3886/E225721V1

Project Description

Summary:  View help for Summary
This paper estimates the direct effects and indirect spillover effects of investment tax credits on firms. Exploiting a differential tax credit rate change by firm size in the German manufacturing sector, I find that lowering a firm’s investment cost by 7.6 percent increases its capital stock by 17.7 percent and employment by 12.0 percent. Positive local spillovers generate one additional manu- facturing job for each directly created job, are strongest between firms in industries connected through input-output linkages, and arise within distances of five kilometers. Firms dependent on local consumer demand also increase employment, while within-industry spillovers generate small negative effects.

Scope of Project

Subject Terms:  View help for Subject Terms Investment Tax Incentives; Capital Stock; Labor Demand; General Equilibrium Spillovers
JEL Classification:  View help for JEL Classification
      D22 Firm Behavior: Empirical Analysis
      H25 Business Taxes and Subsidies including sales and value-added (VAT)
      H32 Fiscal Policies and Behavior of Economic Agents: Firm
      J23 Labor Demand
      R11 Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
Geographic Coverage:  View help for Geographic Coverage Germany
Time Period(s):  View help for Time Period(s) 1995 – 2004
Universe:  View help for Universe German firms in the manufacturing and non-manufacturing sector 
Data Type(s):  View help for Data Type(s) administrative records data; aggregate data; other; text

Methodology

Unit(s) of Observation:  View help for Unit(s) of Observation Firms

Related Publications

Download this project

Published Versions

V1 [2025-07-14]

Export Metadata

Dublin Core

DDI 2.5

Report a Problem

Found a serious problem with the data, such as disclosure risk or copyrighted content? Let us know.

This material is distributed exactly as it arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.