The management function of entrepreneurs and countries’ productivity growth

Vicente Salas-Fumás and J. Javier Sanchez-Asin

Applied Economics, 2013, vol. 45, issue 17, 2349-2360

Abstract: This article examines the determinants of the equilibrium number of entrepreneurs and the level of productivity in economies where individuals make occupational choices between being self-employed or working as an employee. The results of the theoretical model explain some observed empirical regularities, such as the negative association between productivity and self-employment rates in cross-country data. The article also derives and empirically tests an unexplored relationship between entrepreneurship and economic growth, in the form of a positive association between productivity growth in t and the proportion of the self-employed in t − 1, providing a new perspective on cross-country productivity convergence over time.

Date: 2013
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DOI: 10.1080/00036846.2012.663476

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