Using a novel country-industry level panel database with information on newly incorporated firms in 17 European countries between 1997 and 2004, we study how taxation of corporate income affects entry rates and the size of entrants at the country-industry level. After accounting for the possible endogeneity of taxation. we find that a reduction in the effective corporate income tax rate leads to a significant increase in entry rates and to a reduction of the scale of entrants. These effects are non-linear and suggest that corporate income tax reductions affect entry rates only below a certain threshold level.

Corporate Taxation and the Size of New Firms: Evidence from Europe

DI GIACOMO, Marina;SEMBENELLI, Alessandro
2009-01-01

Abstract

Using a novel country-industry level panel database with information on newly incorporated firms in 17 European countries between 1997 and 2004, we study how taxation of corporate income affects entry rates and the size of entrants at the country-industry level. After accounting for the possible endogeneity of taxation. we find that a reduction in the effective corporate income tax rate leads to a significant increase in entry rates and to a reduction of the scale of entrants. These effects are non-linear and suggest that corporate income tax reductions affect entry rates only below a certain threshold level.
2009
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1474197#%23
Entrepreneurship; Corporate income taxation; Incorporation; Firm entry; Firm size; Entry regulation
M. Da Rin; M. Di Giacomo; A. Sembenelli
File in questo prodotto:
File Dimensione Formato  
DarinDigiacomoSembenelli.pdf

Accesso aperto

Tipo di file: MATERIALE NON BIBLIOGRAFICO
Dimensione 164.59 kB
Formato Adobe PDF
164.59 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2318/61208
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact