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The Political Economy of Entrepreneurship

Author

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  • Douhan, Robin

    (Research Institute of Industrial Economics (IFN))

  • Henrekson, Magnus

    (Research Institute of Industrial Economics (IFN))

Abstract

We outline a politico-economic growth system centered around the entrepreneur. By defining entrepreneurs in relation to economic rents we are able to develop a more general theory comprising central aspects of research within the fields of entrepreneurship/small business, public choice and new institutional economics. The entrepreneurial function is shown to depend crucially on the existing institutional framework. We also point to the necessity of viewing institutions as endogenously influenced by entrepreneurs. A typology of entrepreneurship is developed to further our understanding of the bilateral effects between institutional context and entrepreneurial activity. We use developments in modern history as a real-world context to substantiate our framework. Particular attention is devoted to the effects of enforcement of property rights and taxation, two of the most prominent institutions in the literature.

Suggested Citation

  • Douhan, Robin & Henrekson, Magnus, 2007. "The Political Economy of Entrepreneurship," Working Paper Series 716, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0716
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    References listed on IDEAS

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    Cited by:

    1. Frédéric Delmar & Karl Wennberg & Karin Hellerstedt, 2011. "Endogenous growth through knowledge spillovers in entrepreneurship : an empirical test," Post-Print hal-02312920, HAL.
    2. Zoi Pittaki, 2020. "Extending William Baumol’s theory on entrepreneurship and institutions: lessons from post-Second World War Greece," Business History, Taylor & Francis Journals, vol. 62(2), pages 343-363, February.
    3. Robin Douhan & Gunnar Eliasson & Magnus Henrekson, 2007. "Israel M. Kirzner: An Outstanding Austrian Contributor to the Economics of Entrepreneurship," Small Business Economics, Springer, vol. 29(1), pages 213-223, June.
    4. Nafisa Yeasmin, 2016. "The Determinants of Sustainable Entrepreneurship of Immigrants in Lapland: An Analysis of Theoretical Factors," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 4(1), pages 129-159.
    5. Henrekson, Magnus, 2007. "Entrepreneurship and Institutions," Working Paper Series 707, Research Institute of Industrial Economics.

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    More about this item

    Keywords

    Entrepreneurship; Industrial Policy; Innovation; Property Rights; Regulation; Self-employment; Tax Policy;
    All these keywords.

    JEL classification:

    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights

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