Creating and maintaining film clusters: Synthetic control method analysis of the enactment and repeal of US state film incentives

Abstract

The proliferation of US state incentives for film production led to numerous studies of whether the incentives affected production location, including case studies of key early incentive‐adopting states. The overall evidence on the efficacy of incentives is mixed. We carry out numerous additional case studies using the synthetic control method (SCM). A unique contribution of the paper is an examination of both the adoption and repeal of incentives. We also assess whether incentives have spillover effects between production and other activities within the film industry, whether spatial spillovers affect the SCM estimates, and whether the incentive effects are long lasting.