Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/107887
Authors: 
Darnihamedani, Pourya
Block, Joern Hendrich
Hessels, Jolanda
Simonyan, Aram
Year of Publication: 
2015
Series/Report no.: 
Tinbergen Institute Discussion Paper 15-013/VII
Abstract: 
Prior research suggests that start-up costs and taxes negatively influence entry into entrepreneurship. Yet, no distinction is made regarding the type of entrepreneurship, particularly innovative versus non-innovative entrepreneurship. Start-up costs, being one-off costs, may reduce the entry of entrepreneurs whose ideas are not very promising, thus increasing the proportion of innovative entrepreneurs. Taxes, being recurring costs, may reduce the “prize” of innovation and the profit from entrepreneurship, discouraging individuals with innovative business ideas from becoming entrepreneurs. Analyzing a dataset of 632,116 individuals, including 43,223 entrepreneurs from 53 countries, we can confirm our main predictions. Our paper contributes to the discussion on how governmental regulation costs and taxes influence innovative entrepreneurship and technological deve lopment.
Subjects: 
Innovative entrepreneurship
corporate taxes
personal income taxes
start-up costs
entrepreneurial profit
JEL: 
H24
H25
L26
L51
O31
Document Type: 
Working Paper

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