No. 149: Taxation, Labor Market Policy and High-Impact Entrepreneurship
Magnus Henrekson, Dan Johansson and Mikael Stenkula
March 23, 2010
Abstract: Public policy affects the prevalence
and performance of both productive and highimpact entrepreneurship.
High-impact entrepreneurship prospers when knowledge is
successfully generated and exploited in the economy. This process
depends on complementary key actors 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.
Keywords: Entrepreneurship; Gazelles;
High-growth firms; High-impact entrepreneurship Innovation;
Institutions; Labor market policy; Tax policy.
JEL Codes: H32; L5; L25; M13; O31; P14.
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