Using Program Attributes to Measure and Evaluate State Economic Development Strategies

Abstract

In this article, the author analyzes the substance of state-level economic development programs and distills their essential attributes to create measures that distinguish locational from entrepreneurial economic development strategies. After assessing the validity and reliability of the measures, the author assesses whether these strategies are associated with economic growth. Findings indicate that entrepreneurial economic development strategies increase manufacturing employment but have no effect on changes in total state product or aggregate employment. Industrial recruitment strategies are found to have a negative effect on employment growth in the finance, insurance, and real estate sectors. No positive “spinoff” effects to secondary or tertiary economic sectors are associated with either strategy.