Industry Case Studies: Steel, Biofuel Production, Semiconductors, Automobiles, Call Centers

Abstract

This chapter will present case studies of incentives in five industries. The first concerns the steel industry. Classic locational tournaments have characterized the announcement of new plants, while during the current recession, companies have been asking for subsidies to avert shutdowns. The second case examines the use of incentives to biofuel production facilities (note: not general subsidies to biofuels) in a number of countries throughout the world. The third case is microchip fabrication, which pits several locations in the US and Europe against developing countries like Singapore, China and soon, India. Fourth, there will be a brief recounting of selected bidding wars for auto facilities in both the industrialized and developing world. Finally, we analyze a much less capital intensive sector, the call center industry. It will focus in particular on the use of incentives in the spread of this industry to India, South Africa, the Philippines, parts of the Caribbean and Canada, as well as some cases in the US where the use of incentives have been credited with a decision in their favor over competing jurisdictions in India. In all of these cases, there is no way to be exhaustive; instead, limitations of space and information availability play a role.