Tax Policy for Venture Capital Backed Entrepreneurship

Christian Keuschnigg

University of St. Gallen Department of Economics working paper series 2008 from Department of Economics, University of St. Gallen

Abstract: Venture capital has become an important source of financing young entrepreneurial firms. Venture capital backed firms are often perceived as more innovative and as creating more value than others. Perhaps for this reason, policy makers are keen to create a good institutional framework to facilitate the development of an active venture capital industry. We explore the role of tax policy in determining the incentives of individuals to start up new firms and of venture capitalists to finance and advise them. In particular, we examine how business taxation at the company and investor level together with start-up capital subsidies affect the volume and quality of venture capital backed entrepreneurship.

Keywords: Entrepreneurship; venture capital; taxes; subsidies (search for similar items in EconPapers)
JEL-codes: D82 G24 H24 H25 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2008-03
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-ino, nep-pbe and nep-pub
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