 |
Professor Ana Venâncio's article, "Collateral value and entrepreneurship: Evidence from property tax reform", co-authored by João Pereira dos Santos and Miguel Ferreira is one of the three articles awarded by Call for papers on Savings and Financing of the Portuguese Economy. The three winning papers will be presented at a conference tomorrow, December 10, which will be attended by Pedro Siza Vieira, Minister of State, Economy and Digital Transition.
>> Conference Program Link (pdf)
This study analyzes whether an unexpected decrease in the Municipal Property Tax (IMI) facilitates the creation of new companies, allowing the entrepreneur to present higher value real estate guarantees and obtain more financing from credit institutions.
In July 2008, the lowering of the maximum IMI rate from 0.5% to 0.4% forced some municipalities to reduce the tax rate. The authors of the study evaluated the impact of this reform on business dynamics, namely on the rate of creation (and destruction) of new firms and concluded that the municipalities that were forced to lower the IMI show an increase in the rate of entry of new firms, but only in the secondary sector (manufacturing). In the tertiary sector (services) there was no significant increase in the rate of new firm entry. In addition, the startups industrial plants located in these municipalities show an increase in short-term bank financing.
Promoted by the Strategy and Studies Office of the Ministry of Economy and the Portuguese Insurers Association, this Call for Papers aims to encourage studies that allow the identification of problems and the implementation of economic policy solutions in Portugal in this area.
