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Entrepreneurship, Innovation and Economic Growth: Evidence from GEM data

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  • Poh Wong
  • Yuen Ho
  • Erkko Autio

Abstract

Studies on the impact of technological innovation on growth have been largely mute on the role of␣new firm formation. Using cross-sectional data on the 37 countries participating in GEM 2002, this paper uses an augmented Cobb–Douglas production to explore firm formation and technological innovation as separate determinants of growth. One area of interest is the contrast between different types of entrepreneurial activities as measured using GEM Total Entrepreneurial Activity (TEA) rates – high growth potential TEA, necessity TEA, opportunity TEA and overall TEA. Of the four types of entrepreneurship, only high growth potential entrepreneurship is found to have a significant impact on economic growth. This finding is consistent with extant findings in the literature that it is fast growing new firms, not new firms in general, that accounted for most of the new job creation by small and medium enterprises in advanced countries. Copyright Springer 2005

Suggested Citation

  • Poh Wong & Yuen Ho & Erkko Autio, 2005. "Entrepreneurship, Innovation and Economic Growth: Evidence from GEM data," Small Business Economics, Springer, vol. 24(3), pages 335-350, January.
  • Handle: RePEc:kap:sbusec:v:24:y:2005:i:3:p:335-350
    DOI: 10.1007/s11187-005-2000-1
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    References listed on IDEAS

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    3. Mark Casson (ed.), 1990. "Entrepreneurship," Books, Edward Elgar Publishing, number 537.
    4. Andre van Stel & Martin Carree & Roy Thurik, 2004. "The effect of entrepreneurship on national economic growth: an analysis using the GEM database," Papers on Entrepreneurship, Growth and Public Policy 2004-34, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
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    entrepreneurship; economic growth;

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