@TechReport{iza:izadps:dp15668,
            	author={Lerche, Adrian},
            	title={Investment Tax Credits and the Response of Firms},
            	year={2022},
	month={Oct},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={15668},
            	url={https://www.iza.org/index.php/publications/dp15668},
	abstract={This paper estimates the direct effects of investment tax credits on firms' production behavior and the additional indirect effects arising from agglomeration economies. Exploiting a change in tax credit rates by firm size in Germany, I find that manufacturing firms increase capital and employment, with labor demand in information and communication technology-intensive industries shifting towards college-educated workers. Using geolocation data, I show that agglomeration benefits lead to a sizable further firm production expansion with these benefits materializing within distances of 5 kilometers. Worker flows from the service sector and from non-employment, rather than between manufacturing firms, explain the employment effects. },
	keywords={investment tax incentives;capital;labor demand;agglomeration},
            }