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The Effect of Entrepreneurial Activity on National Economic Growth

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Author Info
André Stel ()
Martin Carree
Roy Thurik

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Abstract

Entrepreneurial activity is generally assumed to be an important aspect of the organization of industries most conducive to innovative activity and unrestrained competition. This paper investigates whether total entrepreneurial activity (TEA) influences GDP growth for a sample of 36 countries. We test whether this influence depends on the level of economic development measured as GDP per capita. Adjustment is made for a range of alternative explanations for achieving economic growth by incorporating the Growth Competitiveness Index (GCI). We find that entrepreneurial activity by nascent entrepreneurs and owner/managers of young businesses affects economic growth, but that this effect depends upon the level of per capita income. This suggests that entrepreneurship plays a different role in countries in different stages of economic development. Copyright Springer 2005

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File URL: http://hdl.handle.net/10.1007/s11187-005-1996-6
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Publisher Info
Article provided by Springer in its journal Small Business Economics.

Volume (Year): 24 (2005)
Issue (Month): 3 (02)
Pages: 311-321
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Handle: RePEc:kap:sbusec:v:24:y:2005:i:3:p:311-321

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Web page: http://www.springerlink.com/link.asp?id=100338

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Related research
Keywords: entrepreneural activity; economic growth; economic development; nascent entrepreneurs;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lloyd-Ellis, Huw & Bernhardt, Dan, 2000. "Enterprise, Inequality and Economic Development," Review of Economic Studies, Blackwell Publishing, vol. 67(1), pages 147-68, January.
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  2. Sala-i-Martin, Xavier, 1997. "I Just Ran Two Million Regressions," American Economic Review, American Economic Association, vol. 87(2), pages 178-83, May. [Downloadable!] (restricted)
  3. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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