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Total factor productivity and the role of entrepreneurship

  • Hugo Erken

    ()

    (Ministry of Economic Affairs, Erasmus University Rotterdam)

  • Piet Donselaar

    (Ministry of Economic Affairs)

  • Roy Thurik

    (Erasmus University Rotterdam; Max Planck Institute of Economics; EIM Business and Policy Research)

Total factor productivity of twenty OECD countries for a recent period (1971-2002) is explained using six different models based on the established literature. Traditionally, entrepreneurship is not dealt with in these models. In the present paper it is shown that - when this variable is added - in all models there is a significant influence of entrepreneurship while the remaining effects mainly stay the same. Entrepreneurship is measured as the business ownership rate (number of business owners per workforce) corrected for the level of economic development (GDP per capita).

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Paper provided by Friedrich-Schiller-University Jena in its series Jena Economic Research Papers with number 2008-019.

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Date of creation: 14 Mar 2008
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Handle: RePEc:jrp:jrpwrp:2008-019
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