Entrepreneurship Capital and Technical Efficiency: The Role of New Business / Firms as a Conduit of Knowledge Spillovers

24 Pages Posted: 20 Apr 2016

See all articles by Leopoldo Laborda

Leopoldo Laborda

affiliation not provided to SSRN

J. Luis Guasch

World Bank - Finance, Private Sector and Infrastructure Sector (LCSFP)

Daniel Sotelsek

affiliation not provided to SSRN

Date Written: July 1, 2011

Abstract

Increasingly, entrepreneurship is being discussed and considered as a source of high economic growth and competitiveness. A conceptual process of creative construction that characterizes the dynamics between entrants and incumbents can prove quite useful to analyze the impact of countries' entrepreneurship capital on economic performance and can be a guide for economic policy. This paper applies a Stochastic Frontier Analysis approach to test the hypothesis that entrepreneurship capital promotes economic performance by serving as a conduit of knowledge spillovers. In addition, kernel density functions are employed to analyze convergence (or divergence) in the efficiency estimated for individual countries. The empirical evidence and results here tend to support the hypothesis. Specifically, the empirical analysis shows that the rate of expenditure on research and development in relation to new businesses registered has a positive and significant effect in increasing technical efficiency. These factors facilitate the dissemination of existing knowledge, develop entrepreneurship capital, and thus provide the missing link to economic performance -- entrepreneurship capital. The authors also show the trends and dynamics of changes in countries? technical efficiency.

Keywords: Economic Theory & Research, Agricultural Knowledge and Information Systems, Labor Policies, E-Business, Knowledge for Development

Suggested Citation

Laborda, Leopoldo and Guasch, José Luis and Sotelsek, Daniel, Entrepreneurship Capital and Technical Efficiency: The Role of New Business / Firms as a Conduit of Knowledge Spillovers (July 1, 2011). World Bank Policy Research Working Paper No. 5739. Available at SSRN: https://ssrn.com/abstract=1898012

Leopoldo Laborda (Contact Author)

affiliation not provided to SSRN

No Address Available

José Luis Guasch

World Bank - Finance, Private Sector and Infrastructure Sector (LCSFP) ( email )

1818 H Street, NW
Washington, DC 20433
United States
202 473 8606 (Phone)
202 522 2106 (Fax)

Daniel Sotelsek

affiliation not provided to SSRN

No Address Available

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