Peter Egger, Katharina Erhardt, Christian Keuschnigg, 25 February 2019

The effect of taxes on firm-level investments is very heterogeneous. This column shows that the impact of corporate taxation is up to 70% higher for entrepreneurial firms than for managerial ones, while dividend taxation negatively affects the investment of financially constrained firms but entails no significant impact on cash-rich firms. Policy should provide targeted tax relief to the most constrained firms, where taxes are most harmful, if other policies are unsuccessful in improving access to external funds.

Laura Bottazzi, Marco Da Rin, Thomas Hellmann, 16 August 2007

Research shows that human capital is a key driver of the investment activities of venture capital firms. Improving graduate education, including executive education or other professional training is likely boost professionalism in the industry. Simplifications of tax rules and cross-border investment regulations would boost integration of the European venture capital industry.

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