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Entrepreneurship and Structural Economic Transformation

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  • Gries, Thomas
  • Naude, Wim

Abstract

A stylized fact of economic development is the structural transformation of countries from traditional, mainly agricultural societies to modern economies dominated by manufacturing and services. In this paper we provide an endogenous growth model to illuminate the role of entrepreneurial start-up firms in structural economic transformation. We follow the Lewis-model?s distinction between a traditional and modern sector, and underpin this with micro-foundations. We specify mature and start-up entrepreneurs and make a distinction between survivalist self-employment activities in the traditional sector, and opportunity-driven entrepreneurship in the modern sector. The model shows how opportunity-driven entrepreneurship can drive structural transformation through innovation, provision of intermediate inputs and services (which permits greater specialization in manufacturing), and by increasing employment and productivity in both the modern and traditional sectors.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2008/62.

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Length: 46 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:unu:wpaper:rp2008-62

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Keywords: entrepreneurship; economic development; structural transformation; start-ups;

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Citations

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Cited by:
  1. Túlio Cravo & Adrian Gourlay & Bettina Becker, 2012. "SMEs and regional economic growth in Brazil," Small Business Economics, Springer, vol. 38(2), pages 217-230, February.
  2. Stam, Erik & Stel, Andre van, 2009. "Types of Entrepreneurship and Economic Growth," MERIT Working Papers 049, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  3. Thomas Gries & Wim Naudé, 2010. "Entrepreneurship and structural economic transformation," Small Business Economics, Springer, vol. 34(1), pages 13-29, January.
  4. Bosma, Niels, 2013. "The Global Entrepreneurship Monitor (GEM) and Its Impact on Entrepreneurship Research," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 9(2), pages 143-248, February.
  5. Gries Thomas & Naude Wim, 2011. "Entrepreneurship, Structural Change and a Global Economic Crisis," Entrepreneurship Research Journal, De Gruyter, vol. 1(3), pages 1-43, July.
  6. Dalila NICET – CHENAF (GREThA UMR CNRS 5113) & Eric ROUGIER (GREThA UMR CNRS 5113), 2009. "Human capital and structural change: how do they interact with each other in growth?," Cahiers du GREThA 2009-14, Groupe de Recherche en Economie Théorique et Appliquée.
  7. Juergen Bruenjes & Javier Revilla Diez, 2012. "Opportunity entrepreneurs - potential drivers of non-farm growth in rural Vietnam?," Working Papers on Innovation and Space 2012-01, Philipps University Marburg, Department of Geography.
  8. Naudé, Wim & Matthee, Marianne, 2012. "Do Export Costs Matter in Determining Whether, When, and How Much African Firms Export?," Working Papers 38, JICA Research Institute.
  9. Wim Naudé & José Amorós & Oscar Cristi, 2014. "“Surfeiting, the appetite may sicken”: entrepreneurship and happiness," Small Business Economics, Springer, vol. 42(3), pages 523-540, March.
  10. Naudé, Wim, 2013. "Entrepreneurship and Economic Development: Theory, Evidence and Policy," IZA Discussion Papers 7507, Institute for the Study of Labor (IZA).
  11. Calá, Carla Daniela & Manjón-Antolín, Miguel & Arauzo-Carod, Josep-Maria, 2014. "The determinants of exit in Argentina: core and peripheral regions," Nülan. Deposited Documents 1976, Centro de Documentación, Facultad de Ciencias Económicas y Sociales, Universidad Nacional de Mar del Plata.
  12. Naude, Wim, 2009. "Entrepreneurship is not a Binding Constraint on Growth and Development in the Poorest Countries," Working Paper Series Research Paper No. 2009-4, World Institute for Development Economic Research (UNU-WIDER).
  13. Badibanga, Thaddee Mutumba & Diao, Xinshen & Roe, Terry L. & Somwaru, Agapi, 2008. "Dynamics of Structural Transformation: Understanding the Key Factors That Drive Innovative Activities in Selected Asian and African Countries," Bulletins 43890, University of Minnesota, Economic Development Center.
  14. repec:pdn:wpaper:39 is not listed on IDEAS
  15. Gries, Thomas & Jungblut, Stefan & Naudé, Wim, 2012. "New firm creation and failure: A matching approach," MERIT Working Papers 015, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  16. United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) (ed.), 2009. "Globalization of Production and the Competitiveness of Small and Medium-sized Enterprises in Asia and the Pacific: Trends and Prospects," STUDIES IN TRADE AND INVESTMENT, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), volume 65, number tipub2540, April.
  17. Heather M. Stephens & Mark D. Partridge, 2011. "Do Entrepreneurs Enhance Economic Growth in Lagging Regions?," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 42(4), pages 431-465, December.

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