Collateral value and entrepreneurship: Evidence from a property tax reform

Miguel A. Ferreira, João Pereira Dos Santos () and Ines Venancio

Nova SBE Working Paper Series from Universidade Nova de Lisboa, Nova School of Business and Economics

Abstract: We study the role of property taxes on entrepreneurial activity using a quasi-natural experiment, which unexpectedly reduced the upper bound of the Portuguese property tax rate for urban properties in 2008. Using a diffrence-in-differences approach, we nd that treated municipalities (i.e., municipalities that had a property tax rate above the new upper bound) experienced higher entry rates in the manufacturing sector vis-a-vis control municipalities (i.e., municipalities that had a property tax rate at or below the new upper bound). Taking advantage of rm-level data, we show that start-ups created as a response to the decrease in property taxes in treated municipalities use more debt, invest more, and are more likely to survive.

Keywords: Entrepreneurship; Property taxes; Savings; Portugal (search for similar items in EconPapers)
JEL-codes: H20 L26 R30 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2022
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-eur, nep-pbe, nep-sbm and nep-ure
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https://run.unl.pt/bitstream/10362/143355/3/WP643.pdf

Related works:
Working Paper: Collateral Value and Entrepreneurship: Evidence from a Property Tax Reform (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:unl:unlfep:wp643

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