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Muppets and Gazelles: Political and Methodological Biases in Entrepreneurship Research

Author

Listed:
  • Paul Nightingale

    () (SPRU, University of Sussex, UK)

  • Alex Coad

    () (SPRU, University of Sussex, UK)

Abstract

Despite an almost universally accepted belief outside academia that entrepreneurial activity is a positive driving force in the economy, the accumulated evidence remains largely inconclusive. The paper positions the increased interest in entrepreneurship since the 1980s within its historical context and highlights the significant methodological problems with its analysis. Taking these problems into account it re-evaluates the performance of entrepreneurial firms in terms of innovation, job creation, economic growth, productivity growth, and happiness to show how both positive and negative interpretations can emerge. A pattern of increasingly positive interpretation is observed as one moves from analysis to policy. To address this bias, the paper suggests the single category ‘entrepreneurial firms’ be broken up along a continuum from the large number of economically marginal, undersized, poor performance enterprises to the small number of high performance “gazelles” that drive most positive impact on the economy. This would allow a more realistic evaluation of the impact of entrepreneurs by avoiding a composition fallacy that assigns the benefits of entrepreneurship to the average firm.

Suggested Citation

  • Paul Nightingale & Alex Coad, 2013. "Muppets and Gazelles: Political and Methodological Biases in Entrepreneurship Research," SPRU Working Paper Series 2013-03, SPRU - Science and Technology Policy Research, University of Sussex.
  • Handle: RePEc:sru:ssewps:2013-03
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    Keywords

    Entrepreneurship; Jon creation; Self-employment; New firm formation; Innovation;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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