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Imperfect Transmission of Tacit Knowledge and Other Barriers to Entrepreneurship


Panu Poutvaara


University of Helsinki - Department of Economics; Helsinki Center of Economic Research (HECER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)

Vesa Kanniainen


University of Helsinki - Department of Political and Economic Studies; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
June 2007

IZA Discussion Paper No. 2859
CESifo Working Paper No. 2053

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.

Number of Pages in PDF File: 24

Keywords: barriers to entrepreneurship, tacit knowledge, occupational choice

JEL Classification: J24, H25

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Date posted: July 18, 2007  

Suggested Citation

Poutvaara, Panu and Kanniainen, Vesa, Imperfect Transmission of Tacit Knowledge and Other Barriers to Entrepreneurship (June 2007). IZA Discussion Paper No. 2859; CESifo Working Paper No. 2053. Available at SSRN: http://ssrn.com/abstract=998465

Contact Information

Panu Poutvaara (Contact Author)
University of Helsinki - Department of Economics ( email )
P.O. Box 54
FIN-00014 Helsinki
Finland
HOME PAGE: http://www.valt.helsinki.fi/blogs/poutvaar/
Helsinki Center of Economic Research (HECER) ( email )
FI-00014 Helsinki
Finland
CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
Poschinger Str. 5
Munich, DE-81679
Germany
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Vesa Kanniainen
University of Helsinki - Department of Political and Economic Studies ( email )
P.O. Box 54
FIN-00014 Helsinki
Finland
+358-0-9-1911 (Phone)
+358-0-191-8877 (Fax)
HOME PAGE: http://www.cesifo.de
CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
Poschinger Str. 5
Munich, DE-81679
Germany
HOME PAGE: http://www.CESifo.de
Feedback to SSRN (Beta)


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