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Productive and harmful entrepreneurship in a knowledge economy

Author

Listed:
  • Jürgen Antony

    (Pforzheim University)

  • Torben Klarl

    (University of Bremen)

  • Erik E. Lehmann

    (University of Augsburg)

Abstract

This paper develops an endogenous growth model with productive entrepreneurial activities and rent-seeking. Our purpose is to link contributions to the entrepreneurial and the endogenous growth literature. We deal with complementarity between productive entrepreneurship and harmful rent-seeking activities leading to potentially multiple equilibra in the economy. The degree of rent-seeking is endogenous in our model and is influenced by the economy’s legal and institutional framework as well as capital market imperfections. Policy which establishes the legal environment and financial institutions dealing with capital market imperfections together decides which of the potentially multiple equilibria is chosen by the economy. This institutional choice implies the solution to a trade-off between high economic growth on the one and a high level of productivity on the other hand.

Suggested Citation

  • Jürgen Antony & Torben Klarl & Erik E. Lehmann, 2017. "Productive and harmful entrepreneurship in a knowledge economy," Small Business Economics, Springer, vol. 49(1), pages 189-202, June.
    • Handle: RePEc:kap:sbusec:v:49:y:2017:i:1:d:10.1007_s11187-016-9822-x
    DOI: 10.1007/s11187-016-9822-x
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    3. Shepherd, Dean A. & Osofero, Moses & Wincent, Joakim, 2022. "A personal adversity model of justifying the costs of entrepreneurial action: The case of oil thieves in the Niger DELTA," Journal of Business Venturing, Elsevier, vol. 37(1).
    4. Andrew Smith & Graham Brownlow, 2023. "Informal Institutions as Inhibitors of Rent-Seeking Entrepreneurship: Evidence From U.S. Legal History," Entrepreneurship Theory and Practice, , vol. 47(6), pages 2323-2346, November.
    5. Yonghong Ma & Huili Ni & Xiaomeng Yang & Lingkai Kong & Chunmei Liu, 2023. "Government subsidies and total factor productivity of enterprises: a life cycle perspective," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(1), pages 153-188, April.
    6. Wenting Chen & Chunjia Han & Lei Wang & Petros Ieromonachou & Xiaochen Lu, 2021. "Recognition of entrepreneur’s social ties and firm innovation in emerging markets: explanation from the industrial institutional environment and survival pressure," Asia Pacific Journal of Management, Springer, vol. 38(2), pages 491-518, June.
    7. Ondřej Dvouletý & Alisa Gordievskaya & David Anthony Procházka, 2018. "Investigating the relationship between entrepreneurship and regional development: case of developing countries," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 8(1), pages 1-9, December.
    8. Ramadani, Veland & Hisrich, Robert D. & Abazi-Alili, Hyrije & Dana, Léo-Paul & Panthi, Laxman & Abazi-Bexheti, Lejla, 2019. "Product innovation and firm performance in transition economies: A multi-stage estimation approach," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 271-280.
    9. Uwe Cantner & James A. Cunningham & Erik E. Lehmann & Matthias Menter, 2021. "Entrepreneurial ecosystems: a dynamic lifecycle model," Small Business Economics, Springer, vol. 57(1), pages 407-423, June.

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    More about this item

    Keywords

    Entrepreneurship; Rent-seeking; Endogenous growth; Multiple equilibria;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • G2 - Financial Economics - - Financial Institutions and Services
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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