Learning to be an Entrepreneur

Luigi Guiso () and Fabiano Schivardi ()

No 5290, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Is entrepreneurial talent entirely innate or do people learn to become entrepreneurs? We extend Lucas's (1978) model of entrepreneurship to allow for the possibility that entrepreneurial talents may be acquired by watching other entrepreneurs in action. This model implies that areas with a greater number of firms have higher average firm productivity. We confirm this prediction using Italian firm level data. We show that the endogenous accumulation of entrepreneurial talents is a more convincing explanation for clusters of firms than heterogeneous entry costs. The evidence supports the role of learning even after controlling for other potential sources of local externalities. We also find that other specific implications of the learning mechanism are confirmed by the data.

Keywords: agglomeration economies; clustering; entrepreneurship; learning (search for similar items in EconPapers)
JEL-codes: D24 D62 J23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-ent and nep-hrm
Date: Written
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