Unraveling the relationship between firm size and economic development: The roles of embodied and disembodied technological progress
In the last decade, an increasing body of literature has studied the relation between economic development and the rate of independent entrepreneurship. For several developed countries, this relation seems to have changed from a negative relation into a positive one. However, the role of technology, and in particular the roles of embodied and disembodied technological progress, in shaping this relation has not yet been established. We estimate a model, based on Lucas (1978), able to disentangle the roles of both these types of technological progress in determining average firm size (a concept closely but inversely related to the rate of independent entrepreneurship) for 23 OECD countries over the period 1972-2008. Our estimations allow us to establish, for each country, the relative importance of embodied technological change, vis-à-vis disembodied technological change, in determining average firm size. Our results suggest that, notwithstanding the rise of independent entrepreneurship observed in many countries over the last few decades, economies of scale and scope (embodied technological change) continue to play an important role in many advanced economies.
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| Length: | 21 pages |
| Date of creation: | 15 Oct 2012 |
| Handle: | RePEc:eim:papers:h201109 |
| Contact details of provider: | Postal: P.O. Box 7001, 2701 AA Zoetermeer Phone: (+31) 79 341 36 34 Fax: (+31) 79 341 50 24 Web page: http://www.entrepreneurship-sme.eu/ Email: More information through EDIRC
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mirjam Praag & André Stel, 2013.
"The more business owners, the merrier? The role of tertiary education,"
Small Business Economics,
Springer, vol. 41(2), pages 335-357, August.
- Mirjam van Praag & Andre van Stel, 2011. "The More Business Owners the Merrier? The Role of Tertiary Education," Tinbergen Institute Discussion Papers 11-067/3, Tinbergen Institute.
- André van Stel & Mirjam van Praag, 2011. "The More Business Owners the Merrier? The Role of Tertiary Education," Scales Research Reports H201010, EIM Business and Policy Research.
- Andre van Stel, "undated". "COMPENDIA: Harmonizing business ownership data across countries and over time," Papers on Entrepreneurship, Growth and Public Policy 2005-05, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
- André van Stel, 2004. "COMPENDIA: Harmonizing business ownership data across countries and over time," Scales Research Reports N200413, EIM Business and Policy Research.
- Abdulnasser Hatemi-J, 2008. "Tests for cointegration with two unknown regime shifts with an application to financial market integration," Empirical Economics, Springer, vol. 35(3), pages 497-505, November.
- André van Stel & Chantal Hartog & J. Cieslik Cieslik, 2010. "Measuring Business Ownership Across Countries and Over Time: Extending the COMPENDIA Data Base," Scales Research Reports H201019, EIM Business and Policy Research. Full references (including those not matched with items on IDEAS)
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