Knowledge spillover entrepreneurship in an endogenous growth model

We present a model that separates entrepreneurship from profit-motivated corporate R&D aimed at improving existing production processes. Our model embeds the core idea of the knowledge spillover theory of entrepreneurship in established knowledge-based growth models by enriching their knowledge spillover structure. Introducing knowledge spillovers drives a wedge between the optimal and market allocation of resources between new knowledge creation and commercialization. We show the first best allocation depends exclusively on the relative strength of knowledge spillovers between them and derive propositions to guide policy that can bring the market equilibrium closer to this optimum.     

Introduction to special issue of <Emphasis Type="Italic">Small Business Economics</Emphasis> on female entrepreneurship in developed and developing economies

Research into entrepreneurship has for many years been interested in the differences in rate of participation and performance by female entrepreneurs. The motivation for considering female entrepreneurship in both developing and developed countries arises from our increasing understanding of the significance of the role of women in creating, running and growing businesses as a fundamental driver for economic growth. This special issue examines the reasons for differences in gender participation across levels of development using empirical studies.     

The missing link: knowledge diffusion and entrepreneurship in endogenous growth

The intellectual breakthrough contributed by the new growth theory was the recognition that investments in knowledge and human capital endogenously generate economic growth through the spillover of knowledge. However, endogenous growth theory does not explain how or why spillovers occur. This paper presents a model that shows how growth depends on knowledge accumulation and its diffusion through both incumbents and entrepreneurial activities. We claim that entrepreneurs are one missing link in converting knowledge into economically relevant knowledge. Implementing different regression techniques for the Organisation for Economic Co-operation and Development (OECD) countries during 1981 to 2002 provides surprisingly robust evidence that primarily entrepreneurs contributed to growth and that the importance of entrepreneurs increased in the 1990s. A Granger test confirms that causality goes in the direction from entrepreneurs to growth. The results indicate that policies facilitating entrepreneurship are an important tool to enhance knowledge diffusion and promote economic growth.     

The entrepreneurial regime,learning, and industry turbulence

The role which the technological regime and learning play in determining the extent of industry turbulence, or the amount of firm movements into, within, and out of an industry, is examined. The entrepreneurial regime, in which firms outside of the industry incumbents have the innovative advantage, is found to promote industry turbulence. By contrast, the routinized regime, in which the existing incumbents have the innovative advantage, is identified as impeding industry turbulence. The determinants of small-firm turbulence are found to differ from those for large-firm turbulence. Small-firm turbulence is particularly high in capital-intensive industries, where firms must quickly learn or else face extinction.     

Global entrepreneurship and institutions: an introduction

This article is an introduction to the special issue from the 4th Global Entrepreneurship Monitor Research Conference held at Imperial College Business School, London, in 2010. The article has two objectives. The first is to summarize the history of the GEM consortium, some of the contributions that it has delivered, and some challenges and opportunities ahead. The second is to present a summary of the papers in the context of the utility of GEM data in comparative entrepreneurship research.     

R&D spillovers and innovative activity

The new learning has raised a number of explanations why smaller enterprises may, in fact, tend to have an innovative advantage, at least in certain industries. The purpose of this paper is to identify the degree to which university and corporate R&D spills over to innovative activity at the state level. We find substantial evidence that spillovers are facilitated by the geographic coincidence of universities and research laboratories within the state.     

Effect of yield and price risk on conversion from conventional to organic farming*

Although the benefits of organic farming are already well known, the conversion to organic farming does not proceed as the Dutch government expected. In order to investigate the conversion decisions of Dutch arable farms, a discrete stochastic dynamic utility‐efficient programming (DUEP) model is developed with special attention for yield and price risk of conventional, conversion and organic crops. The model maximizes the expected utility of the farmer depending on the farmer’s risk attitude. The DUEP model is an extension of a dynamic linear programming model that maximized the labour income of conversion from conventional to organic farming over a 10 year planning horizon. The DUEP model was used to model a typical farm for the central clay region in the Netherlands. The results show that for a risk‐neutral farmer it is optimal to convert to organic farming. However, for a more risk‐averse farmer it is only optimal to fully convert if policy incentives are applied such as taxes on pesticides or subsidies on conversion, or if the market for the organic products becomes more stable.     

Contrasting Two Models of Wealth Redistribution

Philanthropy tries to improve the condition of people. Yet there are different models of philanthropy. American philanthropy tries to improve conditions for different people, without reference to race or language; this evolved from the notion of equality. In contrast, Chinese clans arose in Singapore, as a response to a society segmented along racial and linguistic lines; in a culture that emphasized face, rich entrepreneurs could "buy" prestige and leadership positions, by assisting their poor. This article examines philanthropy as practiced by entrepreneurs in America, and compares this to the Chinese model of wealth redistribution. The latter is centered on clan associations. In the new economy, however, these have been losing importance, as governments take on some roles previously taken care of by such associations; this includes, for instance, education and assistance to start-up entrepreneurs. We conclude that there appears to be a relationship between philanthropy, government and entrepreneurship.