University of St. Gallen Economics Discussion Paper No. 2008-07
40 Pages Posted: 2 Apr 2008 Last revised: 25 Oct 2014
Date Written: March 2008
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
JEL Classification: D82, G24, H24, H25
Suggested Citation: Suggested Citation
Keuschnigg, Christian, Tax Policy for Venture Capital Backed Entrepreneurship (March 2008). University of St. Gallen Economics Discussion Paper No. 2008-07. Available at SSRN: https://ssrn.com/abstract=1115822 or http://dx.doi.org/10.2139/ssrn.1115822