Entrepreneurship and the causes of long-term growth

Part of : Αρχείον οικονομικής ιστορίας ; Vol.XIII, No.2, 2001, pages 247-261

In the eighties stagflation and high unemployment caused a renewed interest in supply side economics and in factors determining economic growth. Simultaneously, the eighties and nineties have seen a re-evaluation of the role of small firms and a renewed attention for entrepreneurship. The objective of this paper is to synthesize disparate strands of literature to link entrepreneurship to economic growth. This will be done by investigating the relationship between entrepreneurship and economic growth using elements of various fields: historical views on entrepreneurship, macro-economic growth theory, industrial economics (Porter’s competitive advantage of nations), evolutionary economics, history of economic growth (rise and fall of nations) and the management literature on large corporate and governmental organisations. Understanding the role of entrepreneurship in the process of economic growth requires the decomposition of the concept of entrepreneurship. A first goal of our synthesis is to contribute to the understanding of the dimensions involved, while paying attention to the level of analysis (individual, firm and aggregate level). A second goal is to gain insight in the causal links between these entrepreneurial dimensions and economic growth. A third goal is to make suggestions for future empirical research into the relationship between (dimensions of) entrepreneurship and economic growth.
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