The Impact of Entrepreneurship On Economic Growth: Nants
The Impact of Entrepreneurship On Economic Growth: Nants
The Impact of Entrepreneurship On Economic Growth: Nants
ROY THURIK1,2
'Centre for Advanced Small Business Economics (CASBEC) at Erasmus University, Rotterdam,
2EIM Business and Policy Research, Zoetermeer,
3Faculty of Economics and Business Administration, University of Maastricht
The last two decades have witnessed a wealth of studies analyzing the determi-
nants of entrepreneurship. While some of these studies are theoretical (e.g.
Holmes and Schmitz, 1990), others are empirical (e.g. Evans and Leighton,
1990). The consequences of entrepreneurship, in terms of economic performance,
have also generated an extensive literature. However, this literature has gen-
erally been restricted to two units of observations - that of the establishment
or firm, and that of the region. Noticeably absent are studies linking the impact
of entrepreneurship on performance for the unit of observation of the country.
A large literature has emerged analyzing the impact of entrepreneurship on
economic performance at the level of the firm or establishment. These studies
typically measure economic performance in terms of firm growth and survival
(Audretsch, 1995; Caves, 1998; Sutton, 1997).
The compelling stylized facts that have emerged from this literature are that
entrepreneurial activity, measured in terms of firm size and age, is positively
related to growth.' New firms and (very) small firms grow systematically larger
than large and established incumbents. These findings hold across modern
Western economies and across time periods. The link between entrepreneurship
and performance has also been extended beyond the unit of observation of the
firm to include geographic regions. A small literature exists linking measures
of entrepreneurial activity for regions to the economic performance of those
regions (e.g. Audretsch and Fritsch, 2002; Acs and Armington, 2003).
However, when it comes to linking entrepreneurship to growth at the
national level, there is a relative void despite recent efforts of the Global
Entrepreneurship Monitor (GEM) research program (Reynolds et al., 2001).
The purpose of this chapter is to provide a survey of what is known about the
links between entrepreneurial activity and macro-economic growth. Despite
'See Audretsch, Klomp and Thurik (2002) for a recent survey of studies dealing with Gibrat's
Law.
Z.J. Acs and D.B. Audretsch (eds.), Handbook of Entrepreneurship Research, 437-471
O 2003 Kluwer Academic Publishers. Printed in Great Britain.
438 M.A. Carree and A.R. Thurik