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Abstract:
Like all politics, all entrepreneurship is local. Individuals launch firms and, if successful, expand their enterprises to other locations. But new firms must start somewhere, even if their businesses are conducted largely or exclusively on the Internet. Likewise, policymakers at local and state levels increasingly recognize that entrepreneurship is the key to building and sustaining their economies' growth. Although this is a seemingly obvious proposition, it represents something of a departure from past thinking about how local, state, or regional economies grow. Historically, state and local policymakers have put their energies into trying to attract existing firms from somewhere else, either to relocate to a particular area or to build new facilities there. Such smokestack chasing - or, in this cleaner era, simply firm chasing - often has degenerated into what is essentially a zero-sum game for the national economy. When one city or state offers tax breaks or other financial inducements to encourage firms to locate new plants or headquarters, and succeeds, some other city or state loses out in the process. Local, state, and regional economic development centered on entrepreneurship, however, is a fundamentally different phenomenon. The formation and growth of new firms, especially those built around new products or ways of doing things, wherever this occurs, is clearly a positive sum game, not just for the locality, but for the nation as a whole. This essay provides a guide to policymakers and citizens to what is known about the effects of various local and state policies aimed at fostering entrepreneurially driven growth. There is also much we do not know; thus, the essay identifies subjects that require further research.

entrepreneurship, policy, urban, city, local, state, regional, roadmap, economy

Abstract:
Policy interest since the early 1980s has focused in different ways on the creation of a large, productive, taxable economy - in which entrepreneurship plays a role for employment, income growth and innovation. The current understanding of various forms of entrepreneurship remains incomplete, focusing largely on productive and unproductive entrepreneurship. However, destructive entrepreneurship plays an important role in many, if not most, economies. This paper addresses the conceptual gap in the allocation of entrepreneurship by proposing a theory of destructive entrepreneurship.

destructive entrepreneurship, allocation of entrepreneurship,rent-seeking, rent-destroying, incentives, institutions, property rights, contractual enforcement, conflict, social capital, trust, ethnic capital

Abstract:
We explore if the Knowledge Spillover Theory of Entrepreneurship, applied to FDI, provides at least a partial explanation for the greater emergence of recent knowledge-based entrepreneurship in Ireland compared with Wales. In order to examine how FDI and entrepreneurship policy in these two regions might have influenced the levels of knowledge-based entrepreneurship, we outline FDI and entrepreneurship policies for Wales and Ireland and key measures of knowledge creation, and evaluate the extent and nature of FDI activity and its relationship with entrepreneurship in general and knowledge-based entrepreneurship in particular. Implications include possible policy directions for countries that are characterized by weak knowledge-creating institutions yet wish to encourage knowledge-based entrepreneurship.

Economic Development, Entrepreneurship, Foreign Direct Investment, Ireland, Knowledge Spillovers, Wales

Abstract:
This paper compares two datasets designed to measure entrepreneurship. The Global Entrepreneurship Monitor dataset captures early-stage entrepreneurial activity; the World Bank Group Entrepreneurship Survey dataset captures formal business registration. There are a number of important differences when the data are compared. First, GEM data tend to report significantly greater levels of early-stage entrepreneurship in developing economies than do the World Bank data. The World Bank data tend to be greater than GEM data for developed countries. Second, the magnitude of the difference between the datasets across countries is related to the local institutional and environmental conditions for entrepreneurs, after controlling for levels of economic development. A possible explanation for this is that the World Bank data measure rates of entry in the formal economy, whereas GEM data are reflective of entrepreneurial intent and capture informality of entrepreneurship. This is particularly true for developing countries. Therefore, this discrepancy can be interpreted as the spread between individuals who could potentially operate businesses in the formal sector - and those that actually do so: In other words, GEM data may represent the potential supply of entrepreneurs, whereas the World Bank data may represent the actual rate of entrepreneurship. The findings suggest that entrepreneurs in developed countries have greater ease and incentives to incorporate, both for the benefits of greater access to formal financing and labor contracts, as well as for tax and other purposes not directly related to business activities.

Banks & Banking Reform, E-Business, Access to Finance, Microfinance, Information Security & Privacy

Abstract:
This paper explores the relationship between knowledge creation, entrepreneurship, and economic growth in the United States over the last 150 years. According to the "new growth theory," investments in knowledge and human capital generate economic growth via spillovers of knowledge. But the theory does not explain how or why spillovers occur, or why large investments in R&D do not always result in economic growth. What is missing is "the knowledge filter" - the distinction between general knowledge and economically useful knowledge. Also missing is a mechanism (such as entrepreneurship) converting economically relevant knowledge into economic activity. This paper shows that the unprecedented increase in R&D spending in the United States during and after World War II was converted into economic activity via incumbent firms in the early postwar period and increasingly via new ventures in the last few decades.

knowledge, economic growth, entrepreneurship, spillovers, history

Abstract:
This paper suggests that the spillover of knowledge may not occur automatically as has typically been assumed in models of endogenous growth. Rather, a mechanism is required that serves as a conduit for the spillover and commercialization of knowledge from the source creating it to the firm actually commercializing the new ideas. In this paper, entrepreneurship is identified as one such mechanism facilitating the spillover of knowledge. Using a panel of entrepreneurship data for 18 countries, empirical evidence is found that in addition to measures of R&D and human capital, entrepreneurial activity also serves to promote economic growth.

Entrepreneurship, growth

Abstract:
Creativity is changing the way cities approach economic development and formulate policy. Creative metropolises base their economic development strategies, at least partly, on building communities attractive to the creative class worker. While there are countless examples of high-tech regions transforming into creative economies, traditionally industrial cities have received much less attention in this regard. This research draws on Baltimore to assess the potential of transforming a traditionally industrial region into a creative economy. It analyses Baltimore's performance on dimensions of talent, tolerance, technology, and territory both as a stand-alone metropolitan area and in comparison to similar industrial metropolises. Using data from the US Census Bureau and research on creativity measures, this case study concludes that Baltimore has the opportunity to capitalize on the creative economy because of its openness to diversity, established technology base, and appealing territorial amenities. An important consideration in the transformation towards a creative economy is Baltimore's geographic proximity and access to the largest reservoir of creative talent in the US: Washington, DC.

creativity, creative class, creativity index, creative cities, talent, technology, tolerance, territory, bohemian index, gay index, old industrial cities, Baltimore, economic development, economic growth, entrepreneurship

Abstract:
Are firms born Global? Because knowledge spillovers that lead to new venture creation are geographically constrained we believe that firms are born local. It follows that the decision to create sustainable new ventures is independent from the decision to internationalize, even if that is the ultimate goal of the firm. We explore two avenues to internationalize new ventures, a direct path described in much of the extant literature and an intermediated one. New ventures face high entry barriers and intellectual property rights protection to internationalization, which are circumvented by intermediating activities using existing multinational enterprises as facilitators of internationalization. However, new ventures using the intermediated mode of internationalization face transaction costs and rent extraction from multinational enterprises. Therefore, sustainable new ventures face a strategic decision on how to internationalize.

International Entrepreneurship, Multinational Enterprises, Knowledge Spillovers, Intermediated Internationalization, International New Ventures, Foreign Direct Investment

Abstract:
What differentiates American capitalism from all other forms of industrial capitalism is a historical focus on both the creation of wealth (entrepreneurship) and the reconstitution of wealth (philanthropy). Philanthropy has been part of the implicit American social contract that continuously nurtures and revitalizes economic prosperity. Much of the new wealth created historically has been given back to the community to build many of the great social institutions that have paved the way for future economic growth. This entrepreneurship-philanthropy nexus has not been fully explored by either economists or the general public. The purpose of this paper is to suggest that American philanthropists - particularly those who have made their own fortunes - create foundations that, in turn, contribute to greater and more widespread economic prosperity through knowledge creation. Analyzing philanthropy sheds light on our current understanding of how economic development has occurred, as well as the roots of American economic dominance.

entrepreneurship, philanthropy, capitalism, knowledge

Abstract:
Democratic capitalism has become the popular paradigm in the modern world, and it is spreading further through globalization. It is a model based on growth, expansion and constant innovation. However, it is accompanied by social problems which may worsen despite overall gains in wealth. In this paper, we suggest that democratic capitalist societies may benefit from the application of what has been a primarily American institution: Philanthropy. We present the Entrepreneurship-Philanthropy Cycle, which demonstrates the relationship between wealthy entrepreneurs, philanthropic contributions and economic opportunity. As a nonmarket and nonstate mechanism, philanthropy is unique in its structure and operations, and may offer the ideal approach to solving social problems. We suggest that both the internationalization of American foundations, and the growth of domestic philanthropy, can help developing countries offset social problems.

philanthropy, entrepreneurship, democratic capitalism, foundation, social problems, India education, social innovation

Abstract:
A new model of economic growth introduces the knowledge filter between new knowledge and economically useful knowledge. It identifies both new ventures and incumbent firms as the mechanisms that penetrate the knowledge filter. Recent empirical work has shown that new firms are more proficient at penetrating the knowledge filter than are incumbent firms; however, the analysis has only examined expanding economies and has relied on purely cross-sectional regression methodologies. This study explores the role of new and incumbent firms in penetrating the knowledge filter utilizing recent developments in spatial panel estimation techniques to provide a more robust set of findings. The results suggest those new firms are more proficient at penetrating the knowledge filter in declining and growing regions alike.

Entrepreneurship, Knowledge, Regional Growth, Endogenous Growth

Abstract:
Contemporary theories of entrepreneurship generally focus on the decision-making context of the individual. The recognition of opportunities and the decision to commercialize them is the focal concern. While the prevalent view in the entrepreneurship literature is that opportunities are exogenous, the most prevalent theory of innovation in the economics literature suggests that opportunities are endogenous. This paper bridges the gap between the entrepreneurship and economic literature on opportunity by developing a knowledge spillover theory of entrepreneurship. The basic argument is that knowledge created endogenously via R&D results in knowledge spillovers. Such spillovers give rise to opportunities to be identified and exploited by entrepreneurs. Our results show that there is a strong relationship between knowledge spillovers and new venture creation.

Opportunity, management science, entrepreneurship, knowledge

Abstract:
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. Endogenous growth theory does not explain how or why spillovers occur. The missing link is the mechanism converting knowledge into economically relevant knowledge. This Paper develops a model that introduces a filter between knowledge and economic knowledge and identifies entrepreneurship as a mechanism that reduces the knowledge filter. A cross-country regression analysis over the period 1981-2001 provides empirical support for the model. We conclude that public policies facilitating knowledge spillovers through entrepreneurship may be an important new approach to promoting economic growth.

Endogenous growth, knowledge, innovation, entrepreneurship

Abstract:
In this study, we quantify the role of immigrants in high-tech entrepreneurship in the United States. We report the results of a survey of a nationally representative sample of rapidly growing high-impact, high-tech companies. This group of companies is very important to the U.S. economy, because they account for a disproportionate share of job creation and economic growth. We find that about 16% of the companies in our sample had at least one foreign-born person among their founding teams. This estimate is lower than that found in most previous studies of high-tech immigrant entrepreneurship. Nonetheless, our data show that immigrants play a crucial role in this vital economic activity.

high-technology, immigration, entrepreneurship, foreign-born, high-growth firms

Abstract:
Studying the links between geography and technological change and between entrepreneurship and technological change can be difficult.This paper seeks to create an empirical framework that internalizes entrepreneurial activity and agglomeration effects on knowledge spillovers.The literature regarding entrepreneurship and agglomeration is presented, including information regarding their respective links to technological change and the limitations to studying these links. The data for this study were taken from the European Union records of the Global Entrepreneurship Monitor (GEM) project, which collects data regarding the prevalence of nascent entrepreneurship and of the survivability of startup firms.The data were empirically tested using the Romer (1990) model of aggregate knowledge production as extended by Jones (1995). The results of the study indicate that both agglomeration and entrepreneurship effect technological change in ways that are positive and statistically significant.However, for a few EU countries, these effects were significant but not strong. Provides further support for the models of Romer and Jones. (AKP)

Spatial analysis, Technological change, Acquisitions & mergers, Agglomeration economies, Clusters, Geographic distribution, Global Entrepreneurship Monitor (GEM), Knowledge production, Knowledge spillovers, Methodologies, Regional development

Abstract:
Compares Jaffe's work on the use of patents as a measure of the spillover of university research with the work of Acs and Audretsch in which innovation activity is measured by number of innovations. Jaffe's work, which modified the knowledge production function proposed by Griliches, showed a positive relationship between corporate patent activity and commercial spillovers from university research. This research approach was criticized by many. In 1987, Acs and Audretsch proposed measuring innovative activity by the number of innovations recorded in 1982 by the U.S. Small Business Administration. It was believed that using number of innovations, using those provided a more direct measure than Jaffe's work because inventions that were not patented but were introduced into the market were counted and inventions that were patented but never introduced were not counted. This analysis seeks to compare the two works. Jaffe used a pool of data that spanned an eight-year period while Acs and Audretsch considered a single year, 1982. It is shown that using a single year sample in Jaffe's model does not greatly alter the results, which means that both private corporate expenditures on R&D and university expenditures on research both positively and significantly influence patent activity. The impact of university spillovers is greater on innovations than patents using Jaffe's model. By directly substituting the innovation measure for the patent measure, this research approach shows further support for Jaffe's findings and arguments. (SRD)

U.S. Small Business Administration, Knowledge production, Patents, R&D expenditures, University-firm relations, Knowledge spillovers, Patent productivity, Academic research, Innovations

Abstract:
Probes the impact that various industry characteristics have on the innovative output of firms. Data used for this analysis were gathered by the U.S. Small Business Administration (SBA) through examination of over 100 technology, engineering, and trade journals. The SBA data on new products, processes and services introduced to the market in 1982 was broken down by firm size, industry, and significance. Innovation activity is measured by the number of innovations in each four-digit SIC industry. Prior studies have utilized such data as patents and stock market value for large firms; through this more direct measure of innovation activity, several key findings are made. In an industry composed primarily of large firms, the level of innovation will be higher, though that activity will occur mostly in the smaller firms of that industry -- i.e., innovation appears to be an important competitive strategy for small firms in that environment. Results indicate that lower levels of concentration are associated with increased innovation activity. Further, as industry R&D increases, the number of innovations increases, but this increase is at a decreasing rate. Unionization is found to be negatively related to innovation activity. Although the results do not shed much light on the exact relationship between R&D, appropriability, and innovation activity, they do show support for the proposition that differences in economic and technological environments lead to differences in the innovation activity of large and small firms. (SRD)

Market structure, Industry concentration, Industrial research, Innovation process, R&D, Clusters, Labor unions, Environment, Skilled labor, Large firms

Abstract:
A spatial econometric method is used to determinewhether new ventures matter more than incumbent firms in allowing knowledgespillovers to contribute to economic growth. The model introduces a"knowledge filter" between new knowledge and economic knowledge thatconstitutes a commercial opportunity. Data are collected from63 counties in the state of Colorado betweenthe years of 1990 to 2000. The interaction between knowledge spillovers and newventure creation appears to be a localized, regional phenomenon. Findings showthat the relationship between knowledge and economic growth is regulated by newventures moreso than the absorptive capacity of incumbent firms. Support isfound for the effect of knowledge spillovers on economic growth in terms of therate of new firm births.Conversely, it is found that incumbent firmsnegatively moderate the relationship between knowledge and growth.Consequently, as the value of incumbents rises, the positive relationshipbetween knowledge and growth declines. The findings suggest that incumbentoperations may serve as a medium for knowledge to flow from one region to thenext, which allows for the success and growth of new ventures. (NEE)

County Business Patterns dataset (Census Bureau), U.S. Patent & Trademark Office (USPTO), Colorado Economic and Demographic Information System, U.S. Department of Commerce Bureau of Economic Analysis, U.S. National Science Foundation (NSF), Firm growth, Economic growth, Startups, Established firms, Firm location, Firm survival, Regional markets, Knowledge spillovers

Abstract:
A framework for organizing the literature on the roleof entrepreneurship in low-income communities is developed. A two-by-two matrixis introduced in order to clarify the roles played by supply of inputs anddemand for products in both poor and affluent communities. According to themodel, poor communities do not possess the same functioning markets that richcommunities do. The following section considers what is needed to createfunctioning markets where none exist. Current research suggests that institutional infrastructure, need-basedgovernment support, and a positive business environment are integral to thecreation of new markets. At this point, a discussion of the factors thatmotivate individuals to become entrepreneurs is presented, followed by evidencefrom a series of studies that have examined self-employment in both rich andpoor communities. Studies of the Appalachian Region, for example, reveal thatbusiness retention does not necessarily translate into robust growth andvitality.It is then argued that social entrepreneurship, with itsemphasis on utility maximizing as opposed to profit maximizing, might play animportant role in community building, where government has failed. The studyconcludes with an examination of entrepreneurship policy as a tool forimpacting poor communities. (SAA)

Community development, Social entrepreneurship, Startup rates, Public policies, Job creation, Low income groups, Economic development, Economic growth, Poverty, Economically depressed areas, Market growth

Abstract:
In order to explore the divergent growth rate in cities, which leads to income inequality, the impact of entrepreneurs and their goods on local economies is examined.Specifically, the focus is on how innovative entrepreneurs lead to a variety in goods and economic heterogeneity in cities, which both reduce the divergence of growth rates. Though it is clear that a city's heterogeneity leads to its growth, it is not clear whether heterogeneity results from knowledge spillover or a combination of risk pooling, shared infrastructure, and thick labor markets.A cities heterogeneity can be attributed to its entrepreneurial innovation.In exploring the origin of this innovation, endogenous economic growth theory is discussed. The manner in which entrepreneurship can increase knowledge spillover, and in turn heterogeneity, is also examined. Using the insight garnered from these analyses, a new 'spatial' theory of technology-led regional economic growth is needed to address three fundamental issues: (1) why knowledge-related economic activities concentrate in certain regions, (2) how technological advance occurs and the key processes and institutions involved, and (3) how the role of technological change in regional economic growth can be put into an analytical framework.(SRD)

Endogenous growth, Innovation process, Local economies, Urban areas, Urban development, Knowledge spillovers, Firm growth

Abstract:
The present analysis brings together a series of studies across a spectrum of selected countries in developed Western nations and Eastern Europe to identify the exact role of small firms, and how that role has evolved during the fifteen years preceding the publication of the book in mid-nineties. The studies included provide systematic evidence on the following issues: first, the role of small firms and the extent to which they account for economic activity, and how this varies across nations; second, how the role of small firms varies across sector and industries; third, whether the firm-size distribution has shifted towards or away from small businesses. Results emerging from the present studies indicate that a consistent shift away from large firms and towards small businesses has occurred within the manufacturing sector of all Western countries in the time period under discussion. In contrast, Eastern European countries had experienced a shift away from small enterprises. The major challenge for political and economic reform in Central and Eastern Europe that emerges from these analyses is how to create the strong entrepreneurial sector which exists in the West. Chapters 2 through 7 focus on the role of small firms in the economies of the United States and Western Europe (UK, West Germany, Netherlands, Portugal and Italy). Among the findings: New business formation in the 1980s in the United Kingdom had led to a significant increase in the number of businesses in the service sectors, but not nearly as much increase in manufacturing. Small firms in West Germany are not a source of dramatic job generation. The decrease in average firm size for the West German economy as a whole can more or less completely be explained by the change in sectoral composition. When the employment measure is used, no significant shift in the size of firms in the overall US economy between 1976 and 1986 is noticed. However, when the sales measure is used, a slight trend towards smaller firms can be identified. By contrast, within the manufacturing sector a pronounced shift away from large firms and towards small businesses had occurred. This trend is less apparent when the employment measure is used, but much stronger when the sales measure is applied Smaller firms have provided the bulk of employment in the Netherlands, and there has been a shift towards an increased importance of smaller-scale enterprises? In Portuguese manufacturing, entry barriers, namely economies of scale and product differentiation, had a negative impact on small-firm intensity, and small firms avoided export-oriented industries that are characterized by more intense competition. In the Italian economy there has been great turbulence among small firms. While small firms have persisted since the early 1950s, there has been recent growth, structural changes in the economy, and changes in relationship with large firms. Chapters 8 through 10 focus on Czechoslovakia, East Germany and Poland, respectively. The examination of the role of small firms in Czechoslovak manufacturing offers an alternative to the often fallacious description of firm behavior in the command economy as a strict government controlled hierarchical structure, through an analysis of Czechoslovak manufacturing firms within the context of the economic strategy based on the returns to scale paradigm. The enterprise structure of the past in East Germany has been changing rapidly; this study emphasizes which specific preconditions should be promoted in order to facilitate a vital entrepreneurial sector. A chapter on the implications of the Polish economic reform for small business adds to the discussion of the development of small business in Poland during the transformation from central planning to a market economy, using a sample of small businesses in the area around and including Gdansk. The final ch

Industry sectors, Industry structure, Clusters, Job creation, Economic impact, Barriers to entry, Regulations, Market economies, Economic development, Entrepreneurial economies, Manufacturing industries, Firm size

Abstract:
It seems to be paradoxical that, at the beginning of the 1990s, when technical change seemed to play an unprecedented role in the U.S. welfare, that small firms emerged as a driving force of the U.S. economy. It is usually assumed that technological change requires the quantities of research and resources that giant corporations amass and organize. In response to this phenomenon, this study explores two major concerns: (1) the role of small firms in innovation; and (2) the manner in which market structure, and the firm-size distribution in particular, respond to technological change. The research examines these questions through the lens of industrial organization, analyzing them in the context of the structure-conduct-performance paradigm. The study tests existing hypothesis concerning industrial organization, many of which had never been previously tested duet o data constraints, by applying the newly created SBA data. Two new important data sources are introduced: the Small Business Administration Data Base (SBDB), which provides measures of economic activity by firm size, and Small Business Innovation Data Base (SBIDB), which involves a direct measure of innovation activity by firm size. These data enable a systematic empirical analysis of innovation and firm size. The report describes these datasets, compares them with more traditional data measures, and provides qualifications about the applicability and reliability of the data. The SBIDB data is then used to identify the determinants of innovative activity, and to find out whether those determinants are different for large and small firms. The innovative activity of small firms is found to make an important contribution distinct from that of large firms. The research also shows that industry innovative activity tends to decrease as the level of concentration increases. A model is presented that leads to the hypothesis that four distinct factors are responsible for the presence of small firms in any given industry: (1) the exogenous stock of entrepreneurial talent, (2) a stochastic element of managerial and entrepreneurial talent, (3) economies of scale and capital requirements, and (4) the entrepreneurial strategy deployed by small firms. This hypothesis is tested utilizing a cross-section of manufacturing industries, including a wide spectrum of firm sizes. The analysis also examines the extent of small firms in manufacturing industries. Concludes with the development of a model explaining the inter-industry variation in the presence of small firms. A new measure, employment-weighted gross entry, or births, in order to compare how the patterns of entry vary across firm size, with the traditional measures of entry, and how they are affected by the innovative activity of large and small firms. Two results of the study are: (1) that firms are apparently not deterred from entering industries that are capital-intensive, and (2) that, while the innovative activity of small firms is found to promote the entry of firms of all sizes, the extent of both total innovative activity and R&D intensity is found to inhibit entry. Concludes with a discussion of the role of innovation and firm size in intra-industry dynamics. The study investigates the differences between the growth rates of small and large firms, and examines the validity of the assumption underlying Gibrat's Law. It also tackles the question of what determines the extent of turbulence, or firm movements into, within, and out of an industry, and whether these determinants are different for small and large firms? Overall, small firms play an important role in the process of technological change. They generate market turbulence, competition, and industry renewal. Small firms are effective competitors in international high-tech arenas that require flexibility and the ability to respond to niche markets effici

Industrial organization, Market concentration, Market dynamism, Gibrat's Law, Technological change, Innovation process, Market infrastructures, Industrial research, R&D, Firm size, Market entry, Technology policies, Firm turnover, Firm births, Manufacturing firms

Abstract:
The hypothesis that increased entrepreneurial activity in the early stages of an industry's life cycle leads to higher growth rates of regional economies is tested. As a result, some of the theories explaining the variation in growth rates across local economies are examined. Also noted are the theories that explain variations in growth rates across local economies. Data were used from the Bureau of the Census that includes birth and survival and growth statistics in different types of establishments. Also, a Longitudinal Establishment and Enterprise Microdata (LEEM) file was used that tracks employment, payroll, and firm affiliation for the more than 11 million establishments that had employees during 1989-1999. The LEEM file was constructed by the Bureau of the Census from its Statistics of U.S. Business (SUSB) files. A regression model is presented along with empirical results. Findings indicate that higher rates of entrepreneurial activity were strongly association with faster growth of local economies. It is concluded that new firms are more important than the stock of small firms in a region, but the manufacturing sector appears to be an exception. Preliminary results suggest that theories of growth should involve entrepreneurship to understand better how knowledge spillovers operate.(JSD)

Longitudinal Establishment & Enterprise Microdata (U.S. Census Bureau), U.S. Bureau of the Census, Regional economies, Startups, Economic growth, Employment rates, Firm growth, Knowledge spillovers

Abstract:
The current research on entrepreneurship as an economic phenomenon often assumes its desirability as a driver of economic development and growth. However, entrepreneurial talent can be allocated among productive, unproductive and destructive activities. This process is theorized as driven by institutions. Although the tradeoff between productive and unproductive entrepreneurship has been examined, destructive entrepreneurship has been largely ignored. We build from existing theory and define destructive entrepreneurship as wealth-destroying. We propose three assumptions to develop a model of destructive entrepreneurship that presents the mechanisms through which entrepreneurial talent behaves in this manner. We present four key propositions on the nature and behavior of destructive entrepreneurship. We conclude by identifying policy and research streams that emerge from our model.

destructive entrepreneurship, entrepreneurship, allocation, rent-seeking, incentives

Abstract:
This note implements a novel approach to formalizing spatial externalities by employing spatial econometric methods that combine spatial dependence in the form of spatial autoregressive processes and spatial heterogeneity in the form of spatial regimes. The results confirm earlier findings that academic externalities are not uniform across sectors but also indicate important differences across sectors in terms of agglomeration effects.

Key words: Innovations, high technology R&D, spatial econometrics, knowledge production function