Are Taxes a Critical Factor for Innovative Companies Created by Females?

Abstract

Purpose: This paper focuses on evaluating the effect of taxes and business costs in innovative female entrepreneurial activities. Design/Methodology/Approach:. The research has been performed using the data from different databases: Global Entrepreneurship Monitor (GEM), Organisation for Economic Co-Operation and Development (OECD) and World Bank Doing Business (WBDB) databases for the period 2011-2015, having in scope the OECD countries. The main model utilized is a Logit regression using the innovative company variable as the independent variable. Findings: There are variables that directly influence the decision of creating an innovative company such as the age influencing in a negative way, the older the potential entrepreneur, the less possibility of acting as an entrepreneur in an innovative company, the previous experience in founding other companies, independently of the sector and type, the confidence or the opportunities identified. Income tax and the cost of the business procedures are affecting women negatively when deciding to start a new innovative company. Practical Implications: The results could be useful for governments, that in the post COVID time, will decide to enhance and facilitate economy, especially considering how to modify the tax structure with the main purpose of increasing entrepreneurial activity because this will increase economic growth and job creation. Originality/Value: The analysis contributes to the literature by extending the knowledge of the characteristics behind the female entrepreneurship and exposes the key factors affecting the process of creating innovative business companies, specifically by women.