Many states of the federation have offered tax exemptions to enterprises, aiming to attract investments in the nineties. Considering this competitive environment, this study evaluates, comparatively, the impact of revenues from ICMS - Tax on Goods and Services - on employment generation in the industrial sector and on the sectional GDP, comparing the São Paulo state with the other states of the federation. Two econometric models were utilized, being one the "Differences in Differences", which compares changes in the variables among the states and between the periods before and after the fiscal war. The other model allows to analyze changes in the growth rate of the variables between the periods. Estimates show that the states evaluated, individually or in group, present significant changes in the growth rate in their share of the industrial GDP nationwide, compared to the São Paulo state, after the fiscal war augmentation. The same results do not seem to apply to employment creation, that is, there were not changes in the employment rate in the industrial sector and in the ICMS revenue.
fiscal war; federalism; economic development; tax policy; industrial concentration
