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Taxation, Labor Market Policy and High-Impact Entrepreneurship

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  • Henrekson, Magnus

    () (Research Institute of Industrial Economics (IFN))

  • Johansson, Dan

    () (Ratio)

  • Stenkula, Mikael

    () (Research Institute of Industrial Economics (IFN))

Abstract

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.

Suggested Citation

  • Henrekson, Magnus & Johansson, Dan & Stenkula, Mikael, 2010. "Taxation, Labor Market Policy and High-Impact Entrepreneurship," Working Paper Series 826, Research Institute of Industrial Economics.
  • Handle: RePEc:hhs:iuiwop:0826
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    Cited by:

    1. F.C. Stam, 2019. "The Case against Non-Compete Agreements," Working Papers 19-20, Utrecht School of Economics.
    2. Petutschnig, Matthias, 2017. "Future orientation and taxes: Evidence from big data," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 29(C), pages 14-31.
    3. Josh Lerner & Joacim Tåg, 2013. "Institutions and venture capital," Industrial and Corporate Change, Oxford University Press, vol. 22(1), pages 153-182, February.
    4. Sai Lan & Xiang Gao & Qing Wang & Yilin Zhang, 2018. "Public Policy Environment and Entrepreneurial Activities: Evidence from China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(3), pages 88-108, May.
    5. Johansson, Dan & Stenkula, Mikael & Wykman, Niklas, 2018. "The Taxation of Private Foundations in Sweden 1862–2018," Working Paper Series 1245, Research Institute of Industrial Economics, revised 02 Oct 2019.
    6. Jörn Block, 2016. "Corporate income taxes and entrepreneurship," IZA World of Labor, Institute of Labor Economics (IZA), pages 257-257, May.
    7. Maksim Belitski & Farzana Chowdhury & Sameeksha Desai, 2016. "Taxes, corruption, and entry," Small Business Economics, Springer, vol. 47(1), pages 201-216, June.
    8. Mikael Stenkula, 2012. "Taxation and entrepreneurship in a welfare state," Small Business Economics, Springer, vol. 39(1), pages 77-97, July.
    9. Cervelló-Royo, R. & Moya-Clemente, I. & Perelló-Marín, M.R. & Ribes-Giner, G., 2020. "Sustainable development, economic and financial factors, that influence the opportunity-driven entrepreneurship. An fsQCA approach," Journal of Business Research, Elsevier, vol. 115(C), pages 393-402.
    10. Jeffrey Overall, 2017. "Practice what you preach: the failure of the welfare state and the discovery of total equality through capitalism," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 13(1/2), pages 69-85.
    11. Magnus Henrekson, 2020. "How labor market institutions affect job creation and productivity growth," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-38, January.
    12. Neil Lee, 2014. "What holds back high-growth firms? Evidence from UK SMEs," Small Business Economics, Springer, vol. 43(1), pages 183-195, June.
    13. Estrin, Saul & Korosteleva, Julia & Mickiewicz, Tomasz, 2013. "Which institutions encourage entrepreneurial growth aspirations?," Journal of Business Venturing, Elsevier, vol. 28(4), pages 564-580.
    14. Stefan Fölster & Li Jansson & Anton Nyrenström Gidehag, 2016. "The effect of local business climate on employment," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing, vol. 5(1), pages 2-24, April.
    15. Kun Fu & Anne-Sophie Larsson & Karl Wennberg, 2018. "Habitual entrepreneurs in the making: how labour market rigidity and employment affects entrepreneurial re-entry," Small Business Economics, Springer, vol. 51(2), pages 465-482, August.
    16. Johansson, Dan & Stenkula, Mikael & Wykman, Niklas, 2018. "The Rise of Private Foundations as Owners of Swedish Industry: The Role of Tax Incentives 1862–2018," Working Papers 2018:10, Örebro University, School of Business.
    17. Lucio Fuentelsaz & Consuelo González-Gil & Juan P. Maicas, 2015. "What determines entepreneurial failure: taking advantage of the institutional context," Documentos de Trabajo dt2015-05, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    18. Lukas Held & Andrea M. Herrmann & Allard Mossel, 2018. "Team formation processes in new ventures," Small Business Economics, Springer, vol. 51(2), pages 441-464, August.

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    More about this item

    Keywords

    Entrepreneurship; Gazelles; High-growth firms; High-impact entrepreneurship Innovation; Institutions; Labor market policy; Tax policy;
    All these keywords.

    JEL classification:

    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights

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