Year: 2001
Type: report
Abstract: This paper provides a link between the degree of entrepreneurial activity in a country and the growth\nperformance. While a recent wave of empirical evidence suggests that the extent to which countries have shifted\ntowards an increased role of entrepreneurship varies considerably across countries, virtually nothing is known about\nthe consequences of lagging behind in this process. Do countries that have shifted towards a greater role for\nentrepreneurship enjoy greater growth? This question is crucial to policy makers, because if the opportunity cost,\nmeasured in terms of forgone growth, of a slow adjustment towards a greater role for entrepreneurship is relatively\nlow, the consequences of not engaging in a rapid adjustment process are relatively trivial. However, if the opportunity\ncost is high, the consequences are more alarming. This paper offers two distinct approaches, based on two different\nmeasures of entrepreneurship – the relative share of economic activity accounted for by small firms, and the selfemployment\nrate. In addition, two different measures of performance of economic activity are also analysed –\neconomic growth and reduction of unemployment – to link changes in entrepreneurship to changes in economic\nperformance. Different samples including OECD countries over different time periods reach consistent results –\nincreases in entrepreneurial activity tends to result in higher subsequent growth rates and a reduction of\nunemployment.\nWe are grateful to the suggestions of Thomas Andersson and the anonymous referees of the OECD on earlier\ndrafts of this paper, as well as the contributions of our colleagues on various research projects and papers,\nMartin Carree and Andre van Stel. Some of the statistical results and analyses are taken from joint work with these\nco-authors. Any errors or omissions remain our responsibility.
DOI: 10.1787/736170038056
Authors: David B. Audretsch, Roy Thurik
Language: English
Subfield: Management of Technology and Innovation
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W1534853069