KTH/CESIS Working Paper Series in Economics and Institutions of Innovation
Is Entrepreneurship the Salvation for Enhanced Economic Growth?
Abstract: During the last decades, enhancing entrepreneurship has
emerged as commonly used policy- measure in order to improve economic
growth. However, is it true that entrepreneurship unambiguously can be
claimed to improve economic growth? This paper intends to review the
empirical evidence on the relationship between entrepreneurship on three
measures of economic growth, employment, productivity and aggregate
economic growth. The review shows that the studies that find no positive
relationship between entrepreneurship and productivity growth have studied
a relatively short period. Most studies that have studied a longer period
(about ten years) provide rather clear evidence on the positive
relationship between entrepreneurship and growth. Regarding the
relationship between entrepreneurship and employment growth, the empirical
evidence to some extent point in different directions. However, it must be
concluded that in the long run there seems to be a positive relationship. A
majority of the studies on the relationship between entrepreneurship and
aggregate economic growth find a positive relationship. Studies that find a
negative relationship usually employ non-harmonised self-employment rates
as the measure of entrepreneurship.
Keywords: entrepreneurship; economic growth; productivity; employment; (follow links to similar papers)
JEL-Codes: L26; R11; (follow links to similar papers)
26 pages, September 9, 2008
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