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Billionaires

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  • Leeson, Peter

    (George Mason University)

  • Sanandaji, Tino

    ()
    (Research Institute of Industrial Economics (IFN))

Abstract

Existing studies of entrepreneurship focus on entrepreneurs whose individual contribution to wealth creation is typically trivial: self-employed persons. This paper investigates entrepreneurs whose individual contribution to wealth creation is enormous: billionaires. We explore the relationship between economic development, institutions, and these contrasting kinds of entrepreneurs. We find that the institutions consistent with self-employed entrepreneurs di¤er markedly from the ones consistent with billionaires. Further, only the latter are consistent with the institutions that underlie economic prosperity. Where well-protected private property rights and supporting, market-enhancing institutions flourish, so do billionaires. But self-employed entrepreneurs don't. Where private property rights are weakly protected and interventionist institutions flourish, so do self-employed entrepreneurs. But billionaires don't.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 893.

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Length: 30 pages
Date of creation: 02 Jan 2012
Date of revision:
Handle: RePEc:hhs:iuiwop:0893

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Keywords: Billionaires; Entrepreneurship; Self-employment; Institutions;

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References

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  1. Magnus Henrekson & Tino Sanandaji, 2011. "Entrepreneurship and the theory of taxation," Small Business Economics, Springer, vol. 37(2), pages 167-185, September.
  2. Aidis, Ruta & Estrin, Saul & Mickiewicz, Tomasz, 2009. "Entrepreneurial Entry: Which Institutions Matter?," IZA Discussion Papers 4123, Institute for the Study of Labor (IZA).
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  4. 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.
  5. Harry P Bowen & Dirk De Clercq, 2008. "Institutional context and the allocation of entrepreneurial effort," Journal of International Business Studies, Palgrave Macmillan, vol. 39(4), pages 768-768, June.
  6. van Stel, A.J. & Storey, D. & Thurik, A.R., 2006. "The Effect of Business Regulations on Nascent and Young Business Entrepreneurship," ERIM Report Series Research in Management ERS-2006-052-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
  7. Marco Cagetti & Mariacristina De Nardi, 2006. "Taxation, entrepreneurship, and wealth," Working Paper Series WP-06-07, Federal Reserve Bank of Chicago.
  8. Robin Douhan & Magnus Henrekson, 2010. "Entrepreneurship and second-best institutions: going beyond Baumol’s typology," Journal of Evolutionary Economics, Springer, vol. 20(4), pages 629-643, August.
  9. Paul Reynolds & Niels Bosma & Erkko Autio & Steve Hunt & Natalie De Bono & Isabel Servais & Paloma Lopez-Garcia & Nancy Chin, 2005. "Global Entrepreneurship Monitor: Data Collection Design and Implementation 1998–2003," Small Business Economics, Springer, vol. 24(3), pages 205-231, 02.
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  12. Marianne P. Bitler & Tobias J. Moskowitz & Annette Vissing-Jørgensen, 2005. "Testing Agency Theory with Entrepreneur Effort and Wealth," Journal of Finance, American Finance Association, vol. 60(2), pages 539-576, 04.
  13. Christopher J. Coyne & Peter T. Leeson, 2004. "The Plight of Underdeveloped Countries," Cato Journal, Cato Journal, Cato Institute, vol. 24(3), pages 235-249, Fall.
  14. Anna L. Paulson & Robert M. Townsend & Alexander Karaivanov, 2006. "Distinguishing Limited Liability from Moral Hazard in a Model of Entrepreneurship," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 100-144, February.
  15. Fonseca, Raquel & Lopez-Garcia, Paloma & Pissarides, Christopher A., 2001. "Entrepreneurship, start-up costs and employment," European Economic Review, Elsevier, vol. 45(4-6), pages 692-705, May.
  16. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
  17. Estrin, Saul & Korosteleva, Julia & Mickiewicz, Tomasz, 2009. "Better Means More: Property Rights and High-Growth Aspiration Entrepreneurship," IZA Discussion Papers 4396, Institute for the Study of Labor (IZA).
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Cited by:
  1. Astebro , Thomas B. & Braunerhjelm, Pontus & Broström , Anders, 2012. "Does Academic Entrepreneurship Pay?," Les Cahiers de Recherche 970, HEC Paris.
  2. Rider, Christopher I. & Thompson, Peter & Kacperczyk, Aleksandra & Tåg, Joacim, 2013. "Experience and Entrepreneurship," Working Paper Series 970, Research Institute of Industrial Economics.

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