What is the value of entrepreneurship? A review of recent research

By M. van Praag, P. Versloot. Social Science Research Network, 2007

1,442 citations recorded by the source corpus.

This article examines to what extent recent empirical evidence can collectively and systematically substantiate the claim that entrepreneurship has important economic value. Hence, a systematic review is provided that answers the question: What is the contribution of entrepreneurs to the economy in comparison to non-entrepreneurs? We study the relative contribution of entrepreneurs to the economy based on four measures that have most widely been studied empirically. Hence, we answer the question: What is the contribution of entrepreneurs to (i) employment generation and dynamics, (ii) innovation, and (iii) productivity and growth, relative to the contributions of the entrepreneurs’ counterparts, i.e., the ‘control group’? A fourth type of contribution studied is the role of entrepreneurship in increasing individuals’ utility levels. Based on 57 recent studies of high quality that contain 87 relevant separate analyses, we conclude that entrepreneurs have a very important—but specific—function in the economy. They engender relatively much employment creation, productivity growth and produce and commercialize high-quality innovations. They are more satisfied than employees. More importantly, recent studies show that entrepreneurial firms produce important spillovers that affect regional employment growth rates of all companies in the region in the long run. However, the counterparts cannot be missed either as they account for a relatively high value of GDP, a less volatile and more secure labor market, higher paid jobs and a greater number of innovations and they have a more active role in the adoption of innovations.

Subfields: Accounting, Economics and Econometrics, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/939481b9bf0e59e4d0e307bc17da30f15a708a34

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Citations in the corpus

Sources of persistence in regional start-up rates--evidence from Sweden (2009, background): “Studies that find persistence in the regional distribution of start-up rates generally interpret this as an indication of path dependence in regional start-up dynamics (see e.g. Fritsch and Mueller 2007; Van Stel and Suddle, 2008).”
Total factor productivity and the role of entrepreneurship (2016, neutral): “Although the impact of entrepreneurship on economic growth and employment has been subject to extensive research (Carree and Thurik, 2010; Van Praag and Versloot, 2007), entrepreneurship is absent in studies that examine the long-run relationships between economic variables and economic growth or…”
If you are so smart, why aren't you an Entrepreneur? (2008, positive): “Empirical evidence supporting this theory has been provided by Lazear himself (2005), Wagner (2003) and Silva (2007).”
Harnessing University Entrepreneurship for Economic Growth (2013, background): “…of university spin-offs believing that these new companies will generate new innovations, accelerate productivity, and create jobs and prosperity for regional economies (Carree, 2002; Carree & Thurik, 2006; National Governors Association, 2004; Shane, 2004; van Praag & Versloot, 2007).”
The influence of socio-cultural environments on the performance of nascent entrepreneurs: Community culture, motivation, self-efficacy and start-up success (2012, background): “For instance, past research within work settings shows that the perception of the availability of social support impacts employees’ work motivation (Van Yperen and Hagedoorn 2003).”
Institutions, Latent Entrepreneurship, and Self–Employment: An International Comparison (2012, background): “More educated self-employed individuals tend to be more successful and their businesses tend to have longer duration (Van Praag, 2003).”
The Schumpeterian entrepreneur: a review of the empirical evidence on the antecedents, behaviour and consequences of innovative entrepreneurship (2017, positive): “The approach we use is similar to the approaches used in previous stateof-the-art literature review articles in the fields of entrepreneurship and innovation (e.g. Van Praag and Versloot 2007; Dahlander and Gann 2010).”