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This paper examines the effectiveness of state economic development incentive programs in stimulating new business activity. It reviews literature that identifies factors that potentially influence the effectiveness of incentives. Empirical work draws on a 2018 survey of approximately 150 firms that received at least one award for startup, expansion, or relocation purposes during the period SFY2010–SFY2016 from a state economic development incentive program (i.e., grant, tax credit, loan, equity investment) offered by the Commonwealth of Virginia. The paper evaluates the role of program design features (e.g., discretionary vs. automatic, relative size of incentive), firm characteristics (e.g., size of firm, industry), and locational variables (e.g., state boundary location, rurality) on firm assessments of the role of incentives in business growth decisions. It finds that firms that receive up‐front or discretionary program awards and undertake multistate site searches are less likely to report that the incentive was not needed for their project to succeed. These results suggest that automatic, back‐loaded award programs, and programs that fund noncompetitive projects are less likely to affect firm location and expansion decisions. [ABSTRACT FROM AUTHOR]

Entrepreneurship is considered to be one of the most important engines of growth, and its determinants are widely investigated. Several theories of entrepreneurship have been proposed and tested in the literature, most of them focusing on 'hard factors,' i.e., determinants related to the quality/quantity of inputs and to the size of the market. In this paper, I investigate how the interaction between hard and soft factors may shape the entrepreneurial behavior of individuals. In particular, the aim of the paper is to explore the links among the structure of the family, land inequality at the beginning of the twentieth century, and subsequent entrepreneurship in Italian provinces. Using a novel data set on the Gini coefficient of land inequality in 1931, sharecropping in 1911, and the classification of family structures in 1950, I test their relevance to explaining entrepreneurship. I find that high land concentration with strong family ties reduces the probability of becoming an entrepreneur. Furthermore, the diffusion of sharecropping contracts is associated with higher entrepreneurship rates. Taken together, these results point to a central role played by the organization of agriculture in promoting entrepreneurship. [ABSTRACT FROM AUTHOR]