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Entrepreneurship, Management Services and Economic Growth

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  • Vicente Salas Fumas

    ()
    (Departamento de Economia y Direccion de Empresas, Universidad de Zaragoza)

  • Javier Sanchez Asin
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    Abstract

    We model the joint production of entrepreneurs and workers where the former provide both entrepreneurial (strategic) and managerial (coordination, motivation) services, and management services are shared with individual workers in an output maximizing way. The static equilibrium of the model determines the endogenous share of entrepreneurs in the economy in a given moment of time. The time dynamics of the solution implies that a given growth rate in quality of entrepreneurial services contributes to productivity growth proportionally to the share of entrepreneurs at the start of the period and improvement in quality of entrepreneurial services is convergence enhancing. Model predictions are tested with data from OECD countries in the period 1970-2002. We find that improvements in quality of entrepreneurial services over time explain up to 100% of observed average productivity growth in these countries.

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    Bibliographic Info

    Paper provided by Department of Business Economics, Universitat Autonoma de Barcelona in its series Working Paper with number 200601.

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    Date of creation: Jan 2006
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    Handle: RePEc:bbe:wpaper:200601

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