Innovation, Trade and Finance
Type
discussion paper
Date Issued
2012-02-10
Author(s)
Abstract
This paper provides a theory of incorporation and taxation that emphasizes
the role of the corporate legal form in facilitating access to external capital
and the potential advantages of limited liability. Incorporation relaxes financing
constraints and makes corporations larger than comparable non-corporate
firms. For the same reason, a tax on corporations imposes a smaller first-order
welfare loss than a tax on non-corporate firms. We study the consequences of
tax reform and compare the role of taxation with other institutional reforms.
the role of the corporate legal form in facilitating access to external capital
and the potential advantages of limited liability. Incorporation relaxes financing
constraints and makes corporations larger than comparable non-corporate
firms. For the same reason, a tax on corporations imposes a smaller first-order
welfare loss than a tax on non-corporate firms. We study the consequences of
tax reform and compare the role of taxation with other institutional reforms.
Language
English
Keywords
Innovation
financial development
R&D subsidies
protection.
HSG Classification
contribution to scientific community
Refereed
No
Start page
1
End page
44
Pages
44
Subject(s)
Eprints ID
61205
File(s)![Thumbnail Image]()
Name
InnovTradeFinance2012Feb10.pdf
Size
730.26 KB
Format
Adobe PDF
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