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The Role of Entrepreneurial Human Capital as a Driver of Endogenous Economic Growth

Isaac Ehrlich (), Dunli Li () and Zhiqiang Liu ()
Additional contact information
Dunli Li: University College London
Zhiqiang Liu: University at Buffalo, SUNY

No 11048, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: We model investment in entrepreneurial human capital (EHC) – the representative enterprise's share of production capacity allocated to investment in innovative industrial and commercial knowledge – as a distinct channel through which firm-specific human capital drives endogenous growth. Our model suggests that institutional factors supporting free markets for goods and ideas, and higher educational attainments of entrepreneurs and workers, enhance endogenous economic growth by augmenting the efficiency of investment in EHC rather than exclusively by themselves. We test these implications using data from Global Entrepreneurship Monitor's Adult Population Survey of 63 countries over 2002–2010 and find robust support for these hypotheses.

Keywords: innovation; entrepreneurship; the market for ideas; human capital; endogenous growth (search for similar items in EconPapers)
JEL-codes: L26 O31 O43 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-ent, nep-gro and nep-ino
Date: 2017-09
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Journal Article: The Role of Entrepreneurial Human Capital as a Driver of Endogenous Economic Growth (2017) Downloads
Working Paper: The Role of Entrepreneurial Human Capital as a Driver of Endogenous Economic Growth (2017) Downloads
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