Does START-UP NY Promote Firm Formation?

Abstract

This paper explores the impact of START-UP NY policy throughout simulations by using the agent-based model. In 2013, Governor Cuomo introduced the policy START-UP NY (New York), designed to create more jobs by helping people start or move their qualified businesses into tax-free zones. Measuring the impact of START-UP NY, however, is difficult because the data are not yet available for causal inference purposes. The agent-based model developed for this paper is designed to simulate the impact of START-UP NY on the local economy of Tompkins County by conducting the Cobb-Douglas function into the model using the data from the IMPLAN model. The simulation results show that ensuring a stable demand for firms’ output is more critical for firms to survive than the kind of tax exemptions offered by START-UP NY.