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Entrepreneurship, Management Servicesand Economic Growth

Author

Listed:
  • Vicente Salas Fumás

    () (Departamento de Economía y Dirección de Empresas. Facultad de Ciencias Económicas y Empresariales. Universidad de Zaragoza)

  • J. Javier Sánchez Asín

    () (Departamento de Economía y Dirección de Empresas. Facultad de Ciencias Económicas y Empresariales. Universidad de Zaragoza)

Abstract

We set out to model the joint production of entrepreneurs and workers assuming that the former contribute to the output of the firm by making entrepreneurial decisions (with increasing returns), and managing the productive resources (with decreasing returns). The model explains the equilibrium output of the representative firm and the equilibrium share of entrepreneurs in the working population, as a function of the quality of the entrepreneur and of the elasticity of output to the entrepreneur’s management services. The time dynamics of the solution imply that the contribution to labor productivity growth from increases in the quality of entrepreneurs over time is higher in countries with a larger starting share of entrepreneurs and higher in countries with lower starting labor productivity (convergence enhancing). The model predictions are tested with data from OECD countries for the period 1970-2002. We find that improvements in the quality of entrepreneurs can make a substantial contribution to economic growth by means of more productive management services.

Suggested Citation

  • Vicente Salas Fumás & J. Javier Sánchez Asín, 2007. "Entrepreneurship, Management Servicesand Economic Growth," Documentos de Trabajo dt2007-03, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
  • Handle: RePEc:zar:wpaper:dt2007-03
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    More about this item

    Keywords

    Entrepreneurial quality; productivity growth; OECD countries; Coasian entrepreneur;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M55 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Contracting Devices

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