Tax Policy, Venture Capital, and Entrepreneurship

Christian Keuschnigg and Søren Nielsen

No 7976, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The paper studies the effects of tax policy on venture capital activity. Entrepreneurs pursue a single high risk project each but have no own resources. Financiers provide equity finance. They must structure the entrepreneur's profit share and base salary to assure their incentives for full effort. In addition to providing equity finance, venture capitalists assist with valuable business advice to enhance survival rates. Within a general equilibrium framework with a traditional and an entrepreneurial sector, the paper investigates the effects of taxes on the equilibrium level of entrepreneurship and managerial advice. It considers dierential wage and capital income taxes, a comprehensive income tax, incomplete loss offset, progressive taxation as well as investment and output subsidies to the entrepreneurial sector.

JEL-codes: D82 G24 (search for similar items in EconPapers)
Date: 2000-10
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published as Keuschnigg, Christian and Soren Bo Nielsen. "Tax Policy, Venture Capital, And Entrepreneurship," Journal of Public Economics, 2003, v87(1,Jan), 185-203.

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Related works:
Journal Article: Tax policy, venture capital, and entrepreneurship (2003)
Working Paper: Tax Policy, Venture Capital and Entrepreneurship (2000)
Working Paper: Tax Policy, Venture Capital, and Entrepreneurship (2000)
Working Paper: Tax Policy, Venture Capital, and Entrepreneurship
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