Total Factor Productivity and the Role of Entrepreneurship

Erken, Hugo; Donselaar, Piet; Thurik, Roy

doi:10.2139/ssrn.1398767

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Total Factor Productivity and the Role of Entrepreneurship

Tinbergen Institute Discussion Paper 09-034/4

52 Pages Posted: 8 May 2009

See all articles by Hugo Erken

Hugo Erken

Government of the Netherlands - Ministry of Economic Affairs

Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC); Montpellier Business School; Erasmus Research Institute of Management (ERIM); EIM Netherlands - Business and Policy Research; Tinbergen Institute

Date Written: May 4, 2009

Abstract

Total factor productivity of twenty OECD countries for a recent period (1971-2002) is explained using six different models based on the established literature. Traditionally, entrepreneurship is not dealt with in these models. In the present paper it is shown that - when this variable is added - in all models there is a significant influence of entrepreneurship while the remaining effects mainly stay the same. Entrepreneurship is measured as the business ownership rate (number of business owners per workforce) corrected for the level of economic development (GDP per capita).

Keywords: Total factor productivity, research and development, entrepreneurship, OECD

JEL Classification: E20, L26, M13, O10, O30, O40, O50

Suggested Citation: Suggested Citation

Erken, Hugo and Donselaar, Piet and Thurik, Roy and Thurik, Roy, Total Factor Productivity and the Role of Entrepreneurship (May 4, 2009). Tinbergen Institute Discussion Paper 09-034/4, Available at SSRN: https://ssrn.com/abstract=1398767 or http://dx.doi.org/10.2139/ssrn.1398767