Is More Entrepreneurship Better?

Tinbergen Institute Discussion Paper 09-105/3

27 Pages Posted: 19 Dec 2009

See all articles by Philipp Koellinger

Philipp Koellinger

Vrije Universiteit Amsterdam

Christian Roessler

Erasmus University Rotterdam (EUR); Brown University

Date Written: November 20, 2009


We develop a new perspective on the boundary of the firm that is consistent with the empirical observation that the share of entrepreneurs first decreases and then increases in the course of economic development. Existing theory based on transaction costs is difficult to relate to these well-established dynamics. Our approach focuses on changing incentives to specialize and adapt, in order to access complementarities that arise from diverse abilities and access to wealth. We discuss why the efficient number of entrepreneurs is bounded and changes in the course of economic development.

Keywords: Entrepreneurship, theory of the firm, organizations, economic development

JEL Classification: L26, D20, J24, O10

Suggested Citation

Koellinger, Philipp and Roessler, Christian, Is More Entrepreneurship Better? (November 20, 2009). Tinbergen Institute Discussion Paper 09-105/3, Available at SSRN: or

Philipp Koellinger (Contact Author)

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV


Christian Roessler

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA

Brown University

Box 1860
Providence, RI 02912
United States

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