Total Factor Productivity and Entrepreneurship: Creative Self-Destruction

Jose Maria Sevilla Llewellyn-Jones ()
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Jose Maria Sevilla Llewellyn-Jones: CEU International Doctoral School (CEINDO), Doctorate Program in Law and Economics

Chapter Chapter 8 in Advances in Empirical Economic Research, 2023, pp 133-149 from Springer

Abstract: Abstract The lack of evidence in literature of the relationship between entrepreneurship and economic growth is a known fact as data is limited. The present paper addresses this absence by taking into consideration the economic assumptions from Schumpeter’s theory of creative destruction into a new approach to the relationship between entrepreneurship and total factor productivity (TFP). Using the data from a single country, the United States, a comparative time period analysis is done by adding a business establishment exit rate to a TFP growth regression based on Solow’s neoclassical Cobb-Douglas production function. A significant and positive relationship is found between TFP growth and a business establishment exit rate in a stagnated innovation period (2009–2019), whilst the effects are significant and negative in a highly disruptive innovative one (1995–2005).

Keywords: Entrepreneurship; Schumpeter; Productivity; Panel data (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-22749-3_8

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DOI: 10.1007/978-3-031-22749-3_8

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