Investor Tax Credits and Entrepreneurship: Evidence from US States

• 成果类型: Article
• 署名作者: Denes, Matthew; Howell, Sabrina T. T.; Mezzanotti, Filippo; Wang, Xinxin; Xu, Ting
• 署名单位: Carnegie Mellon University; New York University; Northwestern University; University of California System; University of California Los Angeles; University of Toronto
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13267
• 发表日期: 2023
• 页码: 2621-2671
• 关键词: research-and-development; PRIVATE EQUITY; POLICY; incentives; frictions; taxation; finance; grants; GROWTH; crowd

摘要

Angel investor tax credits are used globally to spur high-growth entrepreneurship. Exploiting their staggered implementation in 31 U.S. states, we find that they increase angel investment yet have no significant impact on entrepreneurial activity. Two mechanisms explain these results: crowding out of alternative financing and low sensitivity of professional investors to tax credits. With a large-scale survey and a stylized model, we show that low responsiveness among professional angels may reflect the fat-tailed return distributions that characterize high-growth startups. The results contrast with evidence that direct subsidies to firms have positive effects, raising concerns about promoting entrepreneurship with investor subsidies.