Working Paper No. 826

Taxation, Labor Market Policy and High-Impact Entrepreneurship

Published: March 23, 2010, revised June 2010Pages: 33Keywords: Entrepreneurship; Gazelles; High-growth firms; High-impact entrepreneurship Innovation; Institutions; Labor market policy; Tax policyJEL-codes: H32; L50; L25; M13; O31; P14

Taxation, Labor Market Policy and High-Impact Entrepreneurship Magnus Henrekson, Dan Johansson and Mikael Stenkula


Public policy affects the prevalence and performance of both productive and high-impact entrepreneurship. High-impact entrepreneurship prospers when knowledge is successfully generated and exploited in the economy. This process depends on complementary key actors who use their competencies in what we denote a competence bloc. Although variations in economic contexts make prescribing a general panacea impossible, a number of relevant policy areas that affect key actors can be identified. In this paper this is done in the areas of tax policy and labor market policy. It is shown that high and/or distortive taxes and heavy labor market regulations impinge on the creation and functioning of competence blocs, thereby reducing high-impact entrepreneurship.

Magnus Henrekson

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Ph: +46 (0)8 665 4502
magnus.henrekson@ifn.se

Mikael Stenkula

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Ph: +46 8 665 4530
Mob: +46 73 844 18 78
mikael.stenkula@ifn.se

An Agenda for Europe

Institutional Reform for Innovation and Entrepreneurship

Omslag 2017 Institutional Reform for Innovation and Entrepreneurship.jpg

The authors of this book, Niklas Elert, Magnus Henrekson and Mikael Stenkula, advise the economies of the European Union to become more entrepreneurial in promoting innovation and economic growth. The authors propose a reform strategy with respect to several aspects to achieve this goal.

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