Imperfect Transmission of Tacit Knowledge and Other Barriers to Entrepreneurship

Vesa Kanniainen and Panu Poutvaara

No 2859, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper identifies several distortions which create barriers to entrepreneurship. First, in addition to the innate entry cost, there are entry costs caused by regulation. Second, union wage policies raise the opportunity cost of entrepreneurship. Third, inefficiencies in the transmission of tacit knowledge between generations of entrepreneurs can arise: with access to within-family ownership transfer, the outside market for entrepreneurship operates as a lemon’s market. This problem becomes relevant when the economic life of a business idea exceeds the active life of an entrepreneur.

Keywords: occupational choice; barriers to entrepreneurship; tacit knowledge (search for similar items in EconPapers)
JEL-codes: H25 J24 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2007-06
New Economics Papers: this item is included in nep-bec, nep-ent and nep-knm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published - published in: Comparative Labor Law & Policy Journal, 2007, 28 (4), 675-694

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Working Paper: Imperfect Transmission of Tacit Knowledge and other Barriers to Entrepreneurship (2007)
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