Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/333726 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 12180
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
The main aim of this paper is to empirically assess the impact of education and tax revenue onfostering new business creation in the OECD countries. To this end, we employ fixed effects and random effects models using panel data from 2006 to 2022, incorporating alternative conditions. Results confirm that while education and the economic situation are key pillars in fostering new business creation, the role of tax revenue in supporting economic development – and, by extension, new business formation – is fundamental, even if non-linear, with a threshold of 30% of GDP. Tax revenue collected by governments provides essential funding for public goods and services such as infrastructure, education, and innovation support programs, all of which contribute to creating an environment where new businesses can emerge and thrive. Our findings remain robust under the GMM estimation.
Subjects: 
new business
tax revenue
education
economic growth
panel data
JEL: 
C23
H2
I2
M20
Document Type: 
Working Paper
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