XXVI Edition

14-15-16 December 2017"

Does Tax Evasion affect firms’ birth rate?

Argentiero Amedeo, University of Perugia, Department of Economics
Chiarini Bruno, University of Naples Parthenope, Department of Economic and Legal Studies
Marzano Elisabetta, University of Naples Parthenope, Department of Economic and Legal Studies and Cesifo

The study of the factors that affect new firm birth is a topic of interest to many parties, either scholars and policy makers. Literature has investigated regional variation in firms birth rate focusing on demographic factors (population growth), entrepreneurial environment characteristics (industrial specialization, industrial intensity, R&D), financial and economic development of the area (credit market, income growth rate, unemployment), socio-economic characteristics (immigration, social capital, human capital) physical and social infrastructure (regional diversity and creativity). In this study we investigate whether the propensity to evade in a territory can affect new firms formation.. As a matter of fact, tax evasion can influence the capability of a firm to raise money to set up a firm but it can also provide additional resources to extend the survival over time, especially when faced with adverse macroeconomic shocks.

Area: Efficiency and Productivity Analysis

Keywords: new firm birth, tax evasion, entry rate

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