I've been reading a lot about state incentive programs for the entertainment industry and I've come to feel about them the way I feel about bunting (in the baseball sense).
These incentives take several forms (for instance tax breaks, transferable tax credits, and/or actual production grants). Most states have some form of them. In Texas, the state government will subsidize a certain percentage of a film or television show production's in-state spending or hiring. As this sort of industry incentive goes, we're relatively demure here; some states will actually subsidize spending and hiring in other states or issue refundable tax credits that exceed a production's total tax liability.
It's obviously hard to estimate what would happen in the absence of such incentives, but most states have at least anecdotal evidence to support the position that these incentives result in in-state hiring that may not have happened otherwise. Generally, this is the conclusion of an analysis sponsored by a business association or industry group. In spite of that, it seems fair to assume that, yes, if you bribe an industry well enough they will come to your state.*
(*Proponents of subsidies sound a lot like anti-tax partisans, arguing that a business will always go where it's tax liability is the smallest. This is clearly not the case, though. A whole bunch of states offer industry incentive packages that are much more generous than Texas', yet Texas still attracts a lot of film and television show productions. While productions may well be responsive to incentives, they're clearly not the exclusive factor in deciding where a production will locate.)
While the incentives may result in jobs and spending that otherwise would not have happened, states lose money on them. The entertainment industry tends to produce jobs that are short-term (they just last the length of the production) or that don't necessarily result in a net gain of employed people (like, a person who works as a private hairdresser getting a job as a film set hairdresser, essentially an employed person trading one job for another). In addition, the industry has a relatively low spending mulitplier. The overall economic activity resulting from a film or TV show production is probably less than the overall economic activity you'd get from putting that same amount of money into a different industry subsidy, another part of the state budget, or even a tax cut.
This is where this topic reminds me of baseball and of bunting. In his great book Moneyball (which is explicitly about baseball statistics but implicitly about public policy) Michael Lewis describes the school of thought that bunting is a terrible strategy, one not worth the cost. Basically, each bunt costs a team a limited resource (an out, of which you only get 27 per game) in order to advance a runner into scoring position. Statistically, though, the inning is probably going to ends before that runner scores, or a subsequent batter hits a triple or a home run (which would have scored the runner anyway).
Practically, though, can a baseball team never bunt? Can they really announce that their opponents will never have to play their infield in? That they can always position for a double-play ground ball instead of a single-play bunt?
Likewise, it might make sense for a state to give up a wasteful incentive program and still not be practical. Or, put another way, it's one of those situations where everyone is kind of right. Supporters of the policy can point to jobs the industry says are created by the incentive, opponents can point to the opportunity cost; apples, oranges. The question really isn't of efficiency; it's more a litmus test for government spending priorities.