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The Missing Link: The Knowledge Filter and Entrepreneurship in Endogenous Growth


  • Acs, Zoltán J
  • Audretsch, David B
  • Braunerhjelm, Pontus
  • Carlsson, Bo


The intellectual breakthrough contributed by the new growth theory was the recognition that investments in knowledge and human capital endogenously generate economic growth through the spillover of knowledge. Endogenous growth theory does not explain how or why spillovers occur. The missing link is the mechanism converting knowledge into economically relevant knowledge. This Paper develops a model that introduces a filter between knowledge and economic knowledge and identifies entrepreneurship as a mechanism that reduces the knowledge filter. A cross-country regression analysis over the period 1981-2001 provides empirical support for the model. We conclude that public policies facilitating knowledge spillovers through entrepreneurship may be an important new approach to promoting economic growth.

Suggested Citation

  • Acs, Zoltán J & Audretsch, David B & Braunerhjelm, Pontus & Carlsson, Bo, 2004. "The Missing Link: The Knowledge Filter and Entrepreneurship in Endogenous Growth," CEPR Discussion Papers 4783, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:4783

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    References listed on IDEAS

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    More about this item


    endogenous growth; entrepreneurship; innovation; knowledge;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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