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Is More Entrepreneurship better?

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Author Info

  • Philipp Koellinger

    (Erasmus University Rotterdam)

  • Christian Roessler

    (Brown University)

Abstract

We develop a new perspective on the boundary of the firm that is consistent with the empirical observation that the share of entrepreneurs first decreases and then increases in the course of economic development. Existing theory based on transaction costs is difficult to relate to these well-established dynamics. Our approach focuses on changing incentives to specialize and adapt, in order to access complementarities that arise from diverse abilities and access to wealth. We discuss why the efficient number of entrepreneurs is bounded and changes in the course of economic development.

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File URL: http://papers.tinbergen.nl/09105.pdf
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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 09-105/3.

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Date of creation: 19 Nov 2009
Date of revision: 03 Dec 2009
Handle: RePEc:dgr:uvatin:20090105

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Web page: http://www.tinbergen.nl

Related research

Keywords: Entrepreneurship; theory of the firm; organizations; economic development;

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References

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  1. André van Stel & Roy Thurik & Sander Wennekers & Martin Carree, 2010. "The relationship between entrepreneurship and economic development: is it U-shaped?," Scales Research Reports H200824, EIM Business and Policy Research.
  2. Broadberry, Stephen N & Gupta, Bishnupriya, 2005. "The Early Modern Great Divergence: Wages, Prices and Economic Development in Europe and Asia, 1500-1800," CEPR Discussion Papers 4947, C.E.P.R. Discussion Papers.
  3. David De Meza & Ben Lockwood, 1998. "Does Asset Ownership Always Motivate Managers? Outside Options And The Property Rights Theory Of The Firm," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 361-386, May.
  4. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
  5. Robert C. Allen, 2003. "Progress and poverty in early modern Europe," Economic History Review, Economic History Society, vol. 56(3), pages 403-443, 08.
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Cited by:
  1. Emilio Congregado & Vicente Esteve & Antonio A. Golpe, 2012. "Job Creation and the Self-employed Firm Size: evidence from Spain," Working Papers 1202, Department of Applied Economics II, Universidad de Valencia.

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