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Entrepreneurship, geography and technological change

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  • Zoltan Acs

  • Attila Varga

Abstract

Technological change is a central element in macroeconomic growth explanation. Endogenous growth models take a revolutionary step towards better understanding the economic growth process by deriving technological change from profit-motivated individual behavior. In endogenous growth theory knowledge spillovers play a fundamental role in the determination of the rate of technological progress. As such the efficiency of transmitting knowledge into economic applications is a crucial factor in explaining macroeconomic growth. Endogenous growth models take this factor exogenous. We argue that variations across countries in entrepreneurship and the spatial structure of economic activities could potentially be the source of different efficiencies in knowledge spillovers and ultimately in economic growth. We develop an empirical model to test both the entrepreneurship and the geography effects on knowledge spillovers. To date the only international data that are collected on the basis of exactly the same principles in each country are the Global Entrepreneurship Monitor (GEM) data. We use the 2001 GEM cross-country data to measure the level of entrepreneurship in each particular economy. For this purpose we apply the TEA index developed within the framework of the GEM project and calculated for each country participating in this international research. Additionally, data on employment, production, patent applications, public and private R&D expenditures originating from different international and national sources are applied in the paper.

Suggested Citation

  • Zoltan Acs & Attila Varga, 2004. "Entrepreneurship, geography and technological change," ERSA conference papers ersa04p516, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa04p516
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    References listed on IDEAS

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    3. A. Varga, 2006. "Spatial Knowledge Spillovers and University Research: Evidence from Austria," Springer Books, in: Innovation, Networks, and Knowledge Spillovers, chapter 10, pages 211-232, Springer.
    4. Blau, David M, 1987. "A Time-Series Analysis of Self-employment in the United State," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 445-467, June.
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    Cited by:

    1. Hans Westlund, 2011. "Multidimensional entrepreneurship: theoretical considerations and Swedish empirics," Regional Science Policy & Practice, Wiley Blackwell, vol. 3(3), pages 199-218, August.
    2. Hans Joachim Schalk & Attila Varga, 2004. "Macroeconomic effects of the geography of knowledge production: EcoRET, a macroeconometric model with regionally endogenized technological change for Hungary," ERSA conference papers ersa04p521, European Regional Science Association.

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