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Working Paper No. 804
Entrepreneurship and Public Policy
Author: Magnus Henrekson and Mikael Stenkula
Keywords: Entrepreneurship; Gazelles; High-growth firms; High-impact entrepreneurship; Innovation; Institutions; Product market regulations; Property rights; Self-employment; Tax policy
Pages: 54
Published: August 18, 2009, revised May 2010
JEL-codes: L25; L26; L53; M13; O31
Abstract

Public policy is currently shifting from SME policy towards entrepreneurship policy, which supports entrepreneurship without directing attention to quantitative goals and specific firms or employment groups. The institutional framework set by public policy affects the prevalence and performance of both productive entrepreneurship and so-called high-impact entrepreneurship in turn. Although varying contexts and economic systems make prescribing a general panacea impossible, a number of relevant policy areas are identified and analyzed. Independent of environment, productive entrepreneurship should be rewarded and unproductive entrepreneurship should be discouraged. Successful ventures must also have the incentive to continue renewing themselves just as it must be easy to start and expand a business. In particular, we analyze regulatory entry and growth barriers, labor market regulation, liquidity constraints and tax policy at length.

 

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