Abstract
U.S. states have little money to spare on risky innovations in emerging fields such as alternative energy production and water reclamation. 1 Yet, each year states offer up billions of dollars in financial incentives such as research and development (R&D) tax credits in order to encourage businesses to locate and invest in their jurisdictions. 2 In granting such incentives, states hope to imitate the success of “innovation clusters” like Silicon Valley. 3 However, some
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