Empirical Analysis of Entrepreneurship and Economic Growth

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Springer Science & Business Media, Jun 15, 2006 - Business & Economics - 235 pages
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The importance of entrepreneurship for achieving economic growth in contemporary economies is widely recognized, both by policy makers and economists. It is deeply embedded in the current European policy approach that the creativity and independence of entrepreneurs contribute to higher levels of economic activity. Indeed, according to the European Commission (2003, p. 9), "The challenge for the European Union is to identify the key factors for building a climate in which entrepreneurial initiative and business activities can thrive. Policy measures should seek to boost the Union's levels of entrepreneurship, adopting the most appropriate approach for producing more entrepreneurs and for getting more firms to grow. " Audretsch (2003, p. 5) states that "Entrepreneurship has become the engine of economic and social development throughout the world. " The relation between entrepreneurship and economic growth is embedded in several strands of the economic literature. A first strand of literature involves the general understanding of the role of entrepreneurship in the modern economy. Seminal contributions were made by Schumpeter (1934), Knight (1921) and Kirzner (1973). These economists stress different aspects of the role of the entrepreneur. While Schumpeter stresses the innovating aspect, Knight stresses the risk assuming aspect. Kirzner, finally, stresses the role of the entrepreneur in leading markets to equilibrium. Acs (1992) discusses the contribution of small firms in modern economies.
 

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Contents

Introduction
1
Economic Development and Business Ownership
11
Business Ownership and Sectoral Growth
39
The Growth Penalty
71
Knowledge Spillovers and Economic Growth
85
The Link between Firm Births and Job Creation
113
Total Entrepreneurial Activity Rates and Economic Growth
145
Business Dynamics and Employment Growth
161
Harmonizing Business Ownership Data
179
Overview and Conclusions
205
References
215
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