Taxes and Venture Capital Support

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dc.contributor.author	Keuschnigg, Christian	en_US
dc.contributor.author	Nielsen, Søren Bo	en_US
dc.date.accessioned	2009-02-04T10:24:55Z
dc.date.available	2009-02-04T10:24:55Z
dc.date.issued	2003-11-21T00:00:00Z	en_US
dc.identifier.uri	http://hdl.handle.net/10398/6821
dc.description.abstract	In this paper we set up a model of start-up finance under double moral hazard. Entrepreneurs lack own resources and business experience to develop their ideas. Venture capitalists can provide start-up finance and commercial support. The effort put forth by either agent contributes to the firm’s success, but is not verifiable. As a result, the market equilibrium is biased towards inefficiently low venture capital support. The capital gains tax becomes especially harmful, as it further impairs advice and causes a first-order welfare loss. Once the capital gains tax is in place, limitations on loss off-set may paradoxically contribute to higher quality of venture capital finance and welfare. Subsidies to physical investment in VC-backed startups are detrimental in our framework. Keywords: Venture capital, capital gains taxation, double moral hazard. JEL-Classification: D82, G24, H24, H25	en_US
dc.format.extent	34 s.	en_US
dc.language	eng	en_US
dc.relation.ispartofseries	LEFIC working paper;2003-03	en_US
dc.subject.other	venturekapital	en_US
dc.subject.other	kursgevinstbeskatning	en_US
dc.subject.other	virksomhedens etablering	en_US
dc.subject.other	iværksættere	en_US
dc.title	Taxes and Venture Capital Support	en_US
dc.type	wp	en_US
dc.accessionstatus	modt03nov21 inrumo	en_US
dc.contributor.corporation	Copenhagen Business School. CBS	en_US
dc.contributor.department	Institut for Nationaløkonomi	en_US
dc.contributor.department	Center for Law, Economics & Financial Institutions
dc.contributor.departmentshort	ECON
dc.contributor.departmentshort	LEFIC
dc.contributor.departmentuk	Department of Economics	en_US
dc.contributor.departmentuk	Center for Law, Economics & Financial Institutions
dc.contributor.departmentukshort	ECON
dc.contributor.departmentukshort	LEFIC
dc.idnumber	x656312776	en_US
dc.publisher.city	København	en_US
dc.publisher.year	2003	en_US