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Imperfect Transmission of Tacit Knowledge and Other Barriers to Entrepreneurship

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  • Kanniainen, Vesa

    (University of Helsinki)

  • Poutvaara, Panu

    (University of Munich)

Abstract

This paper identifies several distortions which create barriers to entrepreneurship. First, in addition to the innate entry cost, there are entry costs caused by regulation. Second, union wage policies raise the opportunity cost of entrepreneurship. Third, inefficiencies in the transmission of tacit knowledge between generations of entrepreneurs can arise: with access to within-family ownership transfer, the outside market for entrepreneurship operates as a lemon’s market. This problem becomes relevant when the economic life of a business idea exceeds the active life of an entrepreneur.

Suggested Citation

  • Kanniainen, Vesa & Poutvaara, Panu, 2007. "Imperfect Transmission of Tacit Knowledge and Other Barriers to Entrepreneurship," IZA Discussion Papers 2859, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2859
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    References listed on IDEAS

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    Cited by:

    1. Thomas Gries & Wim Naudé, 2010. "Entrepreneurship and structural economic transformation," Small Business Economics, Springer, vol. 34(1), pages 13-29, January.
    2. Wim Naudé, 2008. "Entrepreneurship in Economic Development," WIDER Working Paper Series RP2008-20, World Institute for Development Economic Research (UNU-WIDER).
    3. James R. Hines & Niklas Potrafke & Marina Riem & Christoph Schinke, 2019. "Inter vivos transfers of ownership in family firms," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(2), pages 225-256, April.
    4. Jolanda Hessels & U. Brixy & Wim Naudé & Thomas Gries, 2014. "Skill Variety, Innovation and New Business Formation," Scales Research Reports H201013, EIM Business and Policy Research.
    5. Fahmeed Idrees & Hamid Hassan, 2019. "Entrepreneurships Role in Enhancing the Productivity and Sustainability of Pakistan," Global Regional Review, Humanity Only, vol. 4(1), pages 376-383, March.
    6. Thomas Gries & Wim Naudé, 2009. "When to Start a New Firm?: Modelling the Timing of Novice and Serial Entrepreneurs," WIDER Working Paper Series RP2009-39, World Institute for Development Economic Research (UNU-WIDER).
    7. repec:dau:papers:123456789/6913 is not listed on IDEAS

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    More about this item

    Keywords

    occupational choice; barriers to entrepreneurship; tacit knowledge;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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