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Entrepreneurship, economic growth, and innovation: Are feedback effects at work?

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  • Galindo, Miguel-Ángel
  • Méndez, María Teresa

Abstract

This study aims to analyze the relationships between entrepreneurship, innovation and economic growth, and to show the feedback effects in these relationships. A Schumpeterian approach considering three equations linking GDP, innovation, and entrepreneurship facilitates this analysis. This paper presents empirical analysis of entrepreneurial activity in 13 developed countries. Panel data with fixed effects methodology, for the period 2002 to 2007, provides the means to estimate the equations. The analysis shows that several factors have positive impacts on innovation and entrepreneurship, including monetary policy and social climate. Additionally, a feedback effect is at work: economic activity promotes entrepreneurship and innovation activities, and the latter enhances economic activity. Therefore, policymakers must consider this effect when designing economic policies.

Suggested Citation

  • Galindo, Miguel-Ángel & Méndez, María Teresa, 2014. "Entrepreneurship, economic growth, and innovation: Are feedback effects at work?," Journal of Business Research, Elsevier, vol. 67(5), pages 825-829.
  • Handle: RePEc:eee:jbrese:v:67:y:2014:i:5:p:825-829
    DOI: 10.1016/j.jbusres.2013.11.052
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    References listed on IDEAS

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