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California Management Review
California Management Review is a premier academic management journal published at UC Berkeley
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Article Information
Business Experience with Industrial Aid Bonds as a Source of External Financing: Some Empirical Evidence
Thompson, Arthur A.
13
/
2
(
Winter
1970
):
25
-
37
This article focuses on the industrial aid bond financing in the U.S. and assess its impact upon the business community and upon the process of economic development as well. Earlier major corporations of the U.S. were allowed to use municipal industrial aid bonds (IAB) as a means of financing the construction of manufacturing facilities. A municipality for the purpose of constructing an industrial issues industrial aid bonds facility for lease to a privately owned enterprise. Generally speaking, it has been the cost-saving features of municipal industrial aid bonds that have attracted business firms to this means of financing plant facilities. Their cost-saving features are realized in several forms. Less-developed communities and regions actually gain more from IAB than do business firms when one considers the related increases in employment, incomes and living standards. Despite concerted efforts to upgrade education, to provide job training, to build more attractive communities, and to institute regional development projects, some areas and communities will be relatively underdeveloped, lacking in job opportunities and deficient in essential public services.
