The culture of entrepreneurship

Shankha Chakraborty, Jon C. Thompson and Etienne B. Yehoue

Journal of Economic Theory, 2016, vol. 163, issue C, 288-317

Abstract: We study the cultural process through which a society inculcates an entrepreneurial spirit. People work for a guaranteed wage or operate a firm whose risky return depends on business expertise. The latter is culturally acquired, within the family or outside, and people may choose an occupation different from the one they were socialized into. A cultural bias towards safer occupations from colonial and post-colonial policies leads to stagnation where entrepreneurs do not upgrade technology because of their proficiency with existing methods. An aggregate productivity shock can tip this economy towards growth led by established businesses. A human capital shock where existing business expertise is less useful is more disruptive; growth occurs through the emergence of a new class of entrepreneurs. We conclude that culture is not destiny: it adapts even when some cultural traits do not.

Keywords: Entrepreneurship; Culture; Human capital; Colonization; Growth (search for similar items in EconPapers)
JEL-codes: D10 F54 L26 O30 Z10 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

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Related works:
Working Paper: The Culture of Entrepreneurship (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:163:y:2016:i:c:p:288-317

DOI: 10.1016/j.jet.2015.12.007

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