Necessity or Opportunity? Government Size, Tax Policy, Corruption and Implications for Entrepreneurship

Chowdhury, F.

Abstract

Government size, corruption, and tax policy influence individuals' motivation towards necessity or opportunity-driven entrepreneurship. Using a comparative multi-source sample across 52 countries during 2005-2015, we apply a mixed process estimation of the simultaneously unrelated system of equations and unpack these heterogeneous and complex effects. Interestingly, our results show that the influence of tax policy and corruption on necessity and opportunity entrepreneurship depends on government size. Our results hold for numerous robustness analyses.

• Journal Article Type: Article
• Acceptance Date: Apr 9, 2021
• Online Publication Date: Jun 22, 2021
• Publication Date: 2022-04
• Deposit Date: Apr 19, 2021
• Publicly Available Date: Jul 15, 2021
• Journal: Small Business Economics
• Print ISSN: 0921-898X
• Electronic ISSN: 1573-0913
• Publisher: Springer
• Peer Reviewed: Peer Reviewed
• Volume: 58
• Issue: 4
• Pages: 2025-2042
• DOI: https://doi.org/10.1007/s11187-021-00497-2
• Public URL: https://durham-repository.worktribe.com/output/1277132