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Tax policy effects on entrepreneurship in canada, 1984-2009: A dynamic panel provincial data approach

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  • Marco Lugo Rodriguez

Abstract

In this paper, we examine the effects of fiscal policy on entrepreneurship outcomes in the Canadian provinces for the 1984 2009 period. This is the first paper to assess the impact of taxation on entrepreneurship in Canada by using intensive-margin measures (i.e. entrepreneurial income and employment) instead of more commonly used participation measures, as they are thought to be more closely related to policy goals such as entrepreneurial sustainability. A dynamic panel data approach is employed in order to account for potential trends in both taxation policy and entrepreneurial outcomes. The results are consistent with previous literature of the United States and indicate that if the trends, caused by incomplete labour mobility among other things, are indeed important then tax policy has no statistically significant impact on the measured entrepreneurial outcomes.

Suggested Citation

  • Marco Lugo Rodriguez, 2014. "Tax policy effects on entrepreneurship in canada, 1984-2009: A dynamic panel provincial data approach," CIRANO Working Papers 2014s-46, CIRANO.
    • Handle: RePEc:cir:cirwor:2014s-46
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    File URL: https://cirano.qc.ca/files/publications/2014s-46.pdf
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    References listed on IDEAS

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    1. Nadja Kamhi & Danny Leung, 2005. "Recent Developments in Self-Employment in Canada," Staff Working Papers 05-8, Bank of Canada.
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    3. Skriabikova, Olga J. & Dohmen, Thomas & Kriechel, Ben, 2014. "New evidence on the relationship between risk attitudes and self-employment," Labour Economics, Elsevier, vol. 30(C), pages 176-184.
    4. Nadim Ahmad & Richard G. Seymour, 2008. "Defining Entrepreneurial Activity: Definitions Supporting Frameworks for Data Collection," OECD Statistics Working Papers 2008/1, OECD Publishing.
    5. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    6. Christian Pfeifer, 2011. "Risk Aversion and Sorting into Public Sector Employment," German Economic Review, Verein für Socialpolitik, vol. 12(1), pages 85-99, February.
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    Keywords

    Entrepreneurship; tax policy; dynamic panel estimators;
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