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Is Neoclassical Economics still Entrepreneurless?

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  • Milo Bianchi
  • Magnus Henrekson

Abstract

The paper reviews and evaluates some recent contributions on modeling entrepreneurship within a neoclassical framework, analyzing how, and to what extent, the fundamental ingredients suggested in the social science literature were captured. It is shown how these approaches are important in stressing the main elements of a complex picture, without being able to fully describe it. Each modeling attempt focuses only on one specific feature of entrepreneurship, and the entrepreneurial function, broadly perceived, eludes analytical tractability. As a consequence, the models can be useful in analyzing the effect of entrepreneurial behavior at an aggregate level, but not at explaining individual choices. From these observations, it is highlighted how a simplistic interpretation of the existing mainstream approaches incorporating entrepreneurship runs the risk of leading to distortionary policy interventions. Copyright 2005 Blackwell Publishing Ltd..

Suggested Citation

  • Milo Bianchi & Magnus Henrekson, 2005. "Is Neoclassical Economics still Entrepreneurless?," Kyklos, Wiley Blackwell, vol. 58(3), pages 353-377, July.
  • Handle: RePEc:bla:kyklos:v:58:y:2005:i:3:p:353-377
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    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • 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

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