Entrepreneurial innovations and taxation

• 成果类型: Article
• 署名作者: Haufler, Andreas; Norback, Pehr-Johan; Persson, Lars
• 署名单位: University of Munich; Leibniz Association; Ifo Institut; Research Institute of Industrial Economics (IFN); Center for Economic & Policy Research (CEPR)
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2014.03.002
• 发表日期: 2014
• 页码: 13-31
• 关键词: Business taxation; INNOVATION; Loss offset rules; Market entry

摘要

Stimulating entrepreneurship is high on the policy agenda of many countries. We study the effects of tax policies on entrepreneurs' choice of riskiness (or quality) of an innovation project, and on their mode of commercializing the innovation (market entry versus sale). Limited loss offset provisions in the tax system induce entrepreneurs innovating for entry to choose projects with inefficiently little risk. The same distortion does not arise when entrepreneurs sell their innovation in a competitive bidding process to an incumbent before the uncertainty is revealed. Tax systems which systematically favor market entry of entrepreneurs can thus lead to welfare losses due to inefficient quality choices, despite leading to more competition in the product market. (C) 2014 Elsevier B.V. All rights reserved.