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Authors
Advisor(s)
Abstract(s)
We examine the impact of corporate taxation
on entrepreneurship, using a quasi-natural experiment,
which substantially reduced the corporate tax rate for
start-ups located in inland municipalities in Portugal.
Using a difference-in-differences approach and IV regression,
we find that the tax reform increased firm entry
and new firm job creation. The entrepreneurs who took
advantage of this tax reform are relatively older, and are
better-educated individuals. Their start-ups are relatively
larger, more productive, and are more likely to survive
the first 3 years. These findings suggest that corporate
taxation is an imperative constraint for entrepreneurship,
particularly for high-quality entrepreneurs.
These better-educated individuals find it easier to overcome
the hurdles of tax legislation and to make use of
the opportunities created by a specific tax reform.
Description
Keywords
Tax Reform Corporate Taxes Firm Entry Job Creation High-Quality Entrepreneurship
Pedagogical Context
Citation
Venâncio, Ana; Victor Barros and Clara Raposo. (2020). "Corporate taxes and high-quality entrepreneurship." Springer. Small Business Economics. No. 58, pp.353–382.