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Taxation, Labor Market Policy and High-Impact Entrepreneurship

  • Henrekson, Magnus

    ()

    (Research Institute of Industrial Economics (IFN))

  • Johansson, Dan

    ()

    (Ratio)

  • Stenkula, Mikael

    ()

    (Research Institute of Industrial Economics (IFN))

Public policy affects the prevalence and performance of both productive and high-impact entrepreneurship. High-impact entrepreneurship prospers when knowledge is successfully generated and exploited in the economy. This process depends on complementary key ac-tors who use their competencies in what we denote a competence bloc. Although variations in economic contexts make prescribing a general panacea impossible, a number of relevant policy areas that affect key actors can be identified. In this paper this is done in the areas of tax policy and labor market policy. It is shown that high and/or distortive taxes and heavy labor market regulations impinge on the creation and functioning of competence blocs, thereby reducing high-impact entrepreneurship.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 826.

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Length: 33 pages
Date of creation: 23 Mar 2010
Date of revision:
Publication status: Published as Henrekson, Magnus, Dan Johansson and Mikael Stenkula, 'Taxation, Labor Market Policy and High-Impact Entrepreneurship' in Journal of Industry, Competition and Trade, 2010, pages 275-296.
Handle: RePEc:hhs:iuiwop:0826
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