The role of entrepreneurial absorptive capacity for knowledge spillover entrepreneurship

Ronja Kirschning () and Matthias Mrożewski
Additional contact information
Ronja Kirschning: Jean-Baptiste Say Institute
Matthias Mrożewski: Jean-Baptiste Say Institute

Small Business Economics, 2023, vol. 60, issue 1, No 5, 105-120

Abstract: Abstract The Knowledge Spillover Theory of Entrepreneurship (KSTE) assumes a positive effect of a country’s knowledge stock on entrepreneurial activity; however, empirical support for this relationship is largely contradictory. While some studies confirm the positive relationship between knowledge stock and entrepreneurial activity, others find a negative relationship or no relationship at all. We use multivariate ordinary least squares regression on a sample of 58 countries over the period from 2007 to 2012 to test the KSTE across countries. We reconcile the apparent paradox in the KSTE literature and show that the effect of knowledge stock on entrepreneurial activity is contingent upon a country’s entrepreneurial absorptive capacity. While the effect is positive for countries with high levels of entrepreneurial absorptive capacity, the effect is negative for countries with low levels of entrepreneurial absorptive capacity. Our results demonstrate that a high level of entrepreneurial absorptive capacity is a boundary condition for the KSTE to hold at the country level. We further show that policymakers should not solely focus on encouraging and facilitating knowledge generation to increase entrepreneurial activity but also on elevating their country’s entrepreneurial absorptive capacity to create an environment that is conducive to knowledge-based entrepreneurial activity. Plain English Summary The relationship between knowledge stock and entrepreneurship is dependent upon entrepreneurial absorptive capacity. Knowledge that is created by incumbent organizations can spill over to local entrepreneurs. The extent of these knowledge spillover effects may depend on the absorptive capacity of entrepreneurs that is the ability of entrepreneurs to understand knowledge. Our analysis reveals that the relationship between knowledge and entrepreneurship is not uniformly positive but dependent upon a country’s entrepreneurial absorptive capacity. Whereas the relationship is positive for countries with high levels of entrepreneurial absorptive capacity, the relationship is negative for countries with low levels of entrepreneurial absorptive capacity. Our study has implications for policymakers who seek to encourage entrepreneurship within their country by increasing the level of entrepreneurial absorptive capacity.

Keywords: Knowledge spillover entrepreneurship; Entrepreneurial absorptive capacity; Educational quality; Country-level entrepreneurship (search for similar items in EconPapers)
JEL-codes: J24 L26 O31 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://link.springer.com/10.1007/s11187-022-00639-0 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:60:y:2023:i:1:d:10.1007_s11187-022-00639-0

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/11187/PS2

DOI: 10.1007/s11187-022-00639-0

Access Statistics for this article

Small Business Economics is currently edited by Zoltan J. Acs and David B. Audretsch

More articles in Small Business Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().