Explaining entrepreneurial transience: The role of local taxation policy

Jaume Franquesa, Sergey Anokhin, Jino Mwaka

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

Geographical relocation of ventures, together with rates of firm formation and closure, determine the entrepreneurial population dynamics of a region. However, venture migration has remained largely unaddressed by prior entrepreneurship scholars. This paper draws from theoretical frameworks and prior findings in the economic demography literature to explore policy and environmental determinants of regional venture migration rates, referred to as entrepreneurial transience. Using county-level data for the state of Ohio, we show that local taxation is an important driver of entrepreneurial transience. In particular, local income tax rates are found to be negatively related to subsequent net transience - i.e., venture migration deficits or surpluses. Local business property taxes also influence net transience, but the direction of their impact depends on the average income level in the locale.

Original languageEnglish
Pages (from-to)193-224
Number of pages32
JournalAdvances in Entrepreneurship, Firm Emergence and Growth
Volume11
Publication statusPublished - 1 Dec 2009
Externally publishedYes

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)
  • Economics, Econometrics and Finance (miscellaneous)

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