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County Fiscal Policy and Entrepreneurship: The Impact of Occupational License Taxes on Business Startups

Author

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  • Burney, Shaheer
  • Allen, James E. IV
  • Davis, Alison F.

Abstract

In this paper, we create a model of business startup decisions by utility maximizing individuals to determine the impact of county occupational license taxes on business startups. We utilize a unique dataset generated by the Kentucky Entrepreneurship Survey which allows us to observe personal traits of entrepreneurs, each year a startup was established, and the entrepreneurs’ perception of the entrepreneurial culture of each county. Controlling for relevant factors, we find that county-level occupational license taxes do not significantly impact the decision of entrepreneurs to start a business. We do, however, find strong evidence that other factors such as community culture influence startup decisions.

Suggested Citation

  • Burney, Shaheer & Allen, James E. IV & Davis, Alison F., 2014. "County Fiscal Policy and Entrepreneurship: The Impact of Occupational License Taxes on Business Startups," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170312, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea14:170312
    DOI: 10.22004/ag.econ.170312
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    References listed on IDEAS

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    1. Timothy J. Bartik, 2010. "Small Business Start-Ups in the United States: Estimates of the Effects of Characteristics of States," Book chapters authored by Upjohn Institute researchers, in: Zolton Acs (ed.),Entrepreneurship and regional Development, pages 155-169, W.E. Upjohn Institute for Employment Research.
    2. Raj Chetty, 2009. "Sufficient Statistics for Welfare Analysis: A Bridge Between Structural and Reduced-Form Methods," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 451-488, May.
    3. Chen, Chao C. & Greene, Patricia Gene & Crick, Ann, 1998. "Does entrepreneurial self-efficacy distinguish entrepreneurs from managers?," Journal of Business Venturing, Elsevier, vol. 13(4), pages 295-316, July.
    4. Frederic Delmar & Per Davidsson, 2000. "Where do they come from? Prevalence and characteristics of nascent entrepreneurs," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 12(1), pages 1-23, January.
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    Keywords

    Community/Rural/Urban Development; Public Economics;

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