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Innovation and underground entrepreneurship

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  • Rajeev Goel

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  • James Saunoris
  • Xingyuan Zhang

Abstract

This paper examines the impact of innovation on the underground economy, focusing on differences between informal entrepreneurship and the overall shadow economy. Using cross-national data and measuring innovative activity alternately by patent grants and patent applications, results show that increases in innovative activity spur informal entrepreneurship. The effects of innovation on the overall shadow economy are insignificant. Further, general improvements in government effectiveness seem more effective in checking the underground sector than specific initiatives related to minimum wages or taxes. Transition countries, ceteris paribus, have lower informal entrepreneurship, but higher overall underground economy. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Rajeev Goel & James Saunoris & Xingyuan Zhang, 2015. "Innovation and underground entrepreneurship," The Journal of Technology Transfer, Springer, vol. 40(5), pages 800-820, October.
  • Handle: RePEc:kap:jtecht:v:40:y:2015:i:5:p:800-820
    DOI: 10.1007/s10961-015-9420-0
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    References listed on IDEAS

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    Cited by:

    1. repec:kap:sbusec:v:50:y:2018:i:4:d:10.1007_s11187-017-9914-2 is not listed on IDEAS
    2. repec:kap:jtecht:v:44:y:2019:i:1:d:10.1007_s10961-017-9632-6 is not listed on IDEAS
    3. repec:kap:atlecj:v:47:y:2019:i:1:d:10.1007_s11293-019-09612-x is not listed on IDEAS
    4. Saurav Pathak & Emanuel Xavier-Oliveira & André O. Laplume, 2016. "Technology use and availability in entrepreneurship: informal economy as moderator of institutions in emerging economies," The Journal of Technology Transfer, Springer, vol. 41(3), pages 506-529, June.
    5. Dohse, Dirk & Goel, Rajeev K. & Nelson, Michael A., 2018. "What induces firms to license foreign technologies? International survey evidence," Kiel Working Papers 2100, Kiel Institute for the World Economy (IfW).

    More about this item

    Keywords

    Innovation; Patents; Informal entrepreneurship; Underground economy; L26; O39; K4;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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