Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1049: Superentrepreneurship and Global Imbalances: Closing Europe's Gap to Other Industrialized Regions

Magnus Henrekson () and Tino Sanandaji ()
Additional contact information
Magnus Henrekson: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Tino Sanandaji: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

Abstract: The overwhelming majority of self-employed individuals are not entrepreneurial in the Schumpeterian sense. To unmistakably identify Schumpeterian entrepreneurs, we focus on self-made billionaires (in USD) from the Forbes Magazine list who became wealthy by founding new firms. In this way, we identify 996 billionaire entrepreneurs in over fifty countries during the 1996–2010 period. Interestingly, the rate of billionaire entrepreneurs per capita correlates negatively with self-employment rates. Countries with higher incomes, higher trust, lower taxes, more venture capital investment and lower regulatory burdens have higher entrepreneurship rates but less self-employment. Europe has a higher self-employment rate than the United States and East Asia. At the same time, Europe has a lower entrepreneurship rate than competitor regions. Europe underperforms in entrepreneurship despite having advantages such as a skilled labour force, good infrastructure, large markets and strong performance in technological innovation.

Keywords: Entrepreneurship; Innovation; Institutions; Regulation; Self-employment

JEL-codes: L50; M13; O31; P14

32 pages, First version: December 1, 2014. Revised: August 3, 2015. Earlier revisions: August 3, 2015.

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