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Entrepreneurial activity, industry orientation, and economic growth

  • Jolanda Hessels
  • Peter van der Zwan
  • Mark Sanders

There is evidence that entrepreneurial activity plays a non-negligible role in driving economic development. In this paper we investigate whether the industry in which the entrepreneurial activity takes place matters for economic growth, both in developed and developing countries. We distinguish between three types of entrepreneurial activity, based on the technology intensity that is involved: entrepreneurship without any technology intensity, low technology entrepreneurship, and high technology entrepreneurship. Data from the Global Entrepreneurship Monitor are used to construct early-stage entrepreneurial activity rates for almost 70 countries and for 9 years (2001-2009). We first show that entrepreneurial activity is heavily concentrated in no-tech industries, even in advanced economies. In our regressions, we then find that entrepreneurial activity in high-tech industries creates more economic growth as compared to no-tech and low-tech industries. This stresses the importance of high-tech entrepreneurship; in addition, we show that entrepreneurs active in high-tech industries are higher educated and have higher job growth expectations than entrepreneurs in no-tech or low-tech industries. Practical implications are formulated in the concluding section.

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Paper provided by EIM Business and Policy Research in its series Scales Research Reports with number H201307.

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Length: 22 pages
Date of creation: 23 Apr 2013
Date of revision:
Handle: RePEc:eim:papers:h201307
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