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Is Entrepreneurship the Salvation for Enhanced Economic Growth?: A review of the empirical evidence of the effect ofentrepreneurship on employment, productivity andeconomic growth.
KTH, School of Industrial Engineering and Management (ITM), Centres, Centre of Excellence for Science and Innovation Studies, CESIS. KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Economics.ORCID iD: 0000-0002-1692-8677
2008 (English)Report (Other academic)
Abstract [en]

During the last decades, enhancing entrepreneurship has emerged as commonly used policymeasurein order to improve economic growth. However, is it true that entrepreneurshipunambiguously can be claimed to improve economic growth? This paper intends to reviewthe empirical evidence on the relationship between entrepreneurship on three measures ofeconomic growth, employment, productivity and aggregate economic growth. The reviewshows that the studies that find no positive relationship between entrepreneurship andproductivity growth have studied a relatively short period. Most studies that have studied alonger period (about ten years) provide rather clear evidence on the positive relationshipbetween entrepreneurship and growth. Regarding the relationship between entrepreneurshipand employment growth, the empirical evidence to some extent point in different directions.However, it must be concluded that in the long run there seems to be a positive relationship.A majority of the studies on the relationship between entrepreneurship and aggregateeconomic growth find a positive relationship. Studies that find a negative relationship usuallyemploy non-harmonised self-employment rates as the measure of entrepreneurship.

Place, publisher, year, edition, pages
CESIS, KTH Royal Institute of Technology , 2008. , 26 p.
CESIS Working Paper Series in Economics and Institutions of Innovation, 143
Keyword [en]
Entrepreneurship, employment, productivity, economic growth.
National Category
URN: urn:nbn:se:kth:diva-72340OAI: diva2:487512
QC 20120209Available from: 2012-02-09 Created: 2012-01-31 Last updated: 2012-02-09Bibliographically approved

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Nyström, Kristina
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