The missing link: knowledge diffusion and entrepreneurship in endogenous growth
2010 (English)In: Small Business Economics, ISSN 0921-898X, E-ISSN 1573-0913, Vol. 34, no 2, 105-125 p.Article in journal (Refereed) Published
The intellectual breakthrough contributed by the new growth theory was the recognition that investments in knowledge and human capital endogenously generate economic growth through the spillover of knowledge. However, endogenous growth theory does not explain how or why spillovers occur. This paper presents a model that shows how growth depends on knowledge accumulation and its diffusion through both incumbents and entrepreneurial activities. We claim that entrepreneurs are one missing link in converting knowledge into economically relevant knowledge. Implementing different regression techniques for the Organisation for Economic Co-operation and Development (OECD) countries during 1981 to 2002 provides surprisingly robust evidence that primarily entrepreneurs contributed to growth and that the importance of entrepreneurs increased in the 1990s. A Granger test confirms that causality goes in the direction from entrepreneurs to growth. The results indicate that policies facilitating entrepreneurship are an important tool to enhance knowledge diffusion and promote economic growth.
Place, publisher, year, edition, pages
2010. Vol. 34, no 2, 105-125 p.
Endogenous growth, Knowledge, Innovation and entrepreneurship, long-run growth, model, returns, time
Economics and Business
IdentifiersURN: urn:nbn:se:kth:diva-19116DOI: 10.1007/s11187-009-9235-1ISI: 000273677300001ScopusID: 2-s2.0-76049108102OAI: oai:DiVA.org:kth-19116DiVA: diva2:337163
QC 201005252010-08-052010-08-052011-01-21Bibliographically approved