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on Informal and Underground Economics |
| By: | Braunerhjelm, Pontus (Entrepreneurship Forum, CESIS, KTH); Eklund, Johan E. (Entrepreneurship Forum, JIBS) |
| Abstract: | This paper examines the tax administrative burden and its effect on new firm formation. It is well recognized that entrepreneurship and new firm formation are critical factors in determining economic growth and development. New firm entry into the marketplace enhances welfare in two distinct ways: 1) by promoting innovation, productivity and economic growth and 2) by increasing competition, which lowers prices and expands output. It is also well documented that barriers to entry reduce the likelihood that new firms will enter various sectors. We argue that the burden imposed by tax codes and tax compliance constitutes a barrier to entry that has been neglected in the previous literature. We use data from the World Bank to measure the administrative burden that the complexity of tax policy imposes on new firm. Additionally, we use a measure of new firm formation—entry density. Our data cover 118 countries over a period of six years. We find that the entry rate is significantly reduced by the tax administrative burden and that this effect is unrelated to general taxes on corporate profits and is robust to the inclusion of several important control variables. |
| Keywords: | tax administrative burden; entry; entrepreneurship; new firm formation; regulations; tax policy |
| JEL: | D22 H20 K20 L26 L51 |
| Date: | 2013–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0312&r=iue |
| By: | Luis Aguiar (European Commission – JRC - IPTS); Bertin Martens (European Commission – JRC - IPTS) |
| Abstract: | The goal of this paper is to analyze the behaviour of digital music consumers on the Internet. Using clickstream data on a panel of more than 16,000 European consumers, we estimate the effects of illegal downloading and legal streaming on the legal purchases of digital music. Our results suggest that Internet users do not view illegal downloading as a substitute to legal digital music. Although positive and significant, our estimated elasticities are essentially zero: a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchases websites. Online music streaming services are found to have a somewhat larger (but still small) effect on the purchases of digital sound recordings, suggesting complementarities between these two modes of music consumption. According to our results, a 10% increase in clicks on legal streaming websites lead to up to a 0.7% increase in clicks on legal digital purchases websites. We find important cross country difference in these effects. |
| Keywords: | Digital Music, Copyright, Downloading, Streaming, Piracy on the internet |
| JEL: | K42 L82 L86 Z1 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:decwpa:2013-04&r=iue |