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Is Entrepreneurship the Salvation for Enhanced Economic Growth?

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  • Nyström, Kristina

    (Division of Economics KTH and Ratio Institute)

Abstract

During the last decades, enhancing entrepreneurship has emerged as commonly used policy- measure in order to improve economic growth. However, is it true that entrepreneurship unambiguously can be claimed to improve economic growth? This paper intends to review the empirical evidence on the relationship between entrepreneurship on three measures of economic growth, employment, productivity and aggregate economic growth. The review shows that the studies that find no positive relationship between entrepreneurship and productivity growth have studied a relatively short period. Most studies that have studied a longer period (about ten years) provide rather clear evidence on the positive relationship between entrepreneurship and growth. Regarding the relationship between entrepreneurship and employment growth, the empirical evidence to some extent point in different directions. However, it must be concluded that in the long run there seems to be a positive relationship. A majority of the studies on the relationship between entrepreneurship and aggregate economic growth find a positive relationship. Studies that find a negative relationship usually employ non-harmonised self-employment rates as the measure of entrepreneurship.

Suggested Citation

  • Nyström, Kristina, 2008. "Is Entrepreneurship the Salvation for Enhanced Economic Growth?," Working Paper Series in Economics and Institutions of Innovation 143, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0143
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    Cited by:

    1. Monia Lougui & Kristina Nyström, 2014. "What obstacles do entrepreneurs encounter?," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 3(2), pages 275-291, October.
    2. Nyström, Kristina, 2012. "Entrepreneurial Employees: Are they different from independent entrepreneurs?," Working Papers 2012:10, Swedish Entrepreneurship Forum.
    3. Wim Naudé, 2009. "Out with the Sleaze, in with the Ease: Insufficient for Entrepreneurial Development?," WIDER Working Paper Series RP2009-01, World Institute for Development Economic Research (UNU-WIDER).
    4. Wim Naudé & José Ernesto Amorós & Oscar Cristi, 2011. "‘Surfeiting, The Appetite May Sicken’: Entrepreneurship and the Happiness of Nations," Working Papers 2011/07, Maastricht School of Management.
    5. Andersson, Martin & Noseleit, Florian, 2008. "Start-Ups and Employment Growth - Evidence from Sweden," Working Paper Series in Economics and Institutions of Innovation 155, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    6. Naudé, Wim, 2011. "Entrepreneurship is Not a Binding Constraint on Growth and Development in the Poorest Countries," World Development, Elsevier, vol. 39(1), pages 33-44, January.
    7. Kantis, Hugo & Federico, Juan & Trajtenberg, Luis A., 2012. "Latin American Middle-Class Entrepreneurs and their Firms: A Regional View and International Comparison," IDB Publications (Working Papers) 4041, Inter-American Development Bank.
    8. Naudé, Wim, 2011. "Entrepreneurship is Not a Binding Constraint on Growth and Development in the Poorest Countries," World Development, Elsevier, vol. 39(1), pages 33-44, January.
    9. Mayer-Haug, Katrin & Read, Stuart & Brinckmann, Jan & Dew, Nicholas & Grichnik, Dietmar, 2013. "Entrepreneurial talent and venture performance: A meta-analytic investigation of SMEs," Research Policy, Elsevier, vol. 42(6), pages 1251-1273.
    10. Kristina Nyström, 2013. "Entrepreneurial politicians," Small Business Economics, Springer, vol. 41(1), pages 41-54, June.
    11. Martin Andersson & Florian Noseleit, 2011. "Start-ups and employment dynamics within and across sectors," Small Business Economics, Springer, vol. 36(4), pages 461-483, May.
    12. Wim Naudé, 2010. "Entrepreneurship, developing countries, and development economics: new approaches and insights," Small Business Economics, Springer, vol. 34(1), pages 1-12, January.
    13. Chen, Chih Cheng, 2014. "Entrepreneurship, Economic Growth, And Employment : A Case Study Of Taiwan," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 55(1), pages 71-88, June.
    14. Marco Vivarelli, 2013. "Is entrepreneurship necessarily good? Microeconomic evidence from developed and developing countries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(6), pages 1453-1495, December.
    15. Vivarelli, Marco, 2012. "Drivers of entrepreneurship and post-entry performance : microeconomic evidence from advanced and developing countries," Policy Research Working Paper Series 6245, The World Bank.
    16. Vivarelli, Marco, 2012. "Entrepreneurship in Advanced and Developing Countries: A Microeconomic Perspective," IZA Discussion Papers 6513, Institute of Labor Economics (IZA).
    17. Stefan Fölster & Li Jansson & Anton Nyrenström Gidehag, 2016. "The effect of local business climate on employment," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 5(1), pages 2-24, April.
    18. Wim Naudé & José Amorós & Oscar Cristi, 2014. "“Surfeiting, the appetite may sicken”: entrepreneurship and happiness," Small Business Economics, Springer, vol. 42(3), pages 523-540, March.

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    More about this item

    Keywords

    entrepreneurship; economic growth; productivity; employment;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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