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Entrepreneurship and structural economic transformation

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  • Thomas Gries

    ()

  • Wim Naudé

    ()

Abstract

A stylized fact of economic development is the structural transformation of countries from traditional, mainly agricultural societies to modern economies dominated by manufacturing and services. In this paper we provide an endogenous growth model to illuminate the role of entrepreneurial start-up firms in structural economic transformation. We follow the Lewis-model?s distinction between a traditional and modern sector, and underpin this with micro-foundations. We specify mature and start-up entrepreneurs and make a distinction between survivalist self-employment activities in the traditional sector, and opportunity-driven entrepreneurship in the modern sector. The model shows how opportunity-driven entrepreneurship can drive structural transformation through innovation, provision of intermediate inputs and services (which permits greater specialization in manufacturing), and by increasing employment and productivity in both the modern and traditional sectors.

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Article provided by Springer in its journal Small Business Economics.

Volume (Year): 34 (2010)
Issue (Month): 1 (January)
Pages: 13-29
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Handle: RePEc:kap:sbusec:v:34:y:2010:i:1:p:13-29

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Keywords: Economic development; Entrepreneurship; Start-ups; Structural transformation; L26; M13; O10; O14;

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Citations

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Cited by:
  1. Naude, Wim & Matthee, Marianne, 2012. "Do Export Costs Matter in Determining Whether, When, and How Much African Firms Export?," Working Papers 38, JICA Research Institute.
  2. Gries, Thomas & Naude, Wim, 2010. "Entrepreneurship, Structural Change and a Global Economic Crisis," Working Papers wp2010-57, World Institute for Development Economic Research (UNU-WIDER).
  3. Thomas Gries & Wim Naudé, 2010. "Entrepreneurship and structural economic transformation," Small Business Economics, Springer, vol. 34(1), pages 13-29, January.
  4. Gries, Thomas & Jungblut, Stefan & Naudé, Wim, 2012. "New firm creation and failure: A matching approach," UNU-MERIT Working Paper Series 015, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology.
  5. Stam, Erik & Stel, Andre van, 2009. "Types of Entrepreneurship and Economic Growth," UNU-MERIT Working Paper Series 049, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology.
  6. United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) (ed.), 2009. "Globalization of Production and the Competitiveness of Small and Medium-sized Enterprises in Asia and the Pacific: Trends and Prospects," STUDIES IN TRADE AND INVESTMENT, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), volume 65, number tipub2540, April.
  7. Badibanga, Thaddee Mutumba & Diao, Xinshen & Roe, Terry L. & Somwaru, Agapi, 2008. "Dynamics of Structural Transformation: Understanding the Key Factors That Drive Innovative Activities in Selected Asian and African Countries," Bulletins 43890, University of Minnesota, Economic Development Center.
  8. Dalila NICET – CHENAF (GREThA UMR CNRS 5113) & Eric ROUGIER (GREThA UMR CNRS 5113), 2009. "Human capital and structural change: how do they interact with each other in growth?," Cahiers du GREThA 2009-14, Groupe de Recherche en Economie Théorique et Appliquée.

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