The Role of Entrepreneurial Human Capital as a Driver of Endogenous Economic Growth

49 Pages Posted: 28 Aug 2017 Last revised: 1 Nov 2024

See all articles by Isaac Ehrlich

Isaac Ehrlich

State University of New York at Buffalo - Department of Economics; National Bureau of Economic Research (NBER); University of Chicago - University of Chicago Press; Institute for the Study of Labor (IZA)

Dunli Li

University College London

Zhiqiang Liu

SUNY at Buffalo, College of Arts & Sciences, Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: August 2017

Abstract

We model investment in entrepreneurial human capital (EHC) - the representative enterprise’s share of production capacity allocated to investment in innovative industrial and commercial knowledge – as a distinct channel through which firm-specific human capital drives endogenous growth. Our model suggests that institutional factors supporting free markets for goods and ideas, and higher educational attainments of entrepreneurs and workers, enhance endogenous economic growth by augmenting the efficiency of investment in EHC rather than exclusively by themselves. We test these implications using data from Global Entrepreneurship Monitor’s Adult Population Survey of 63 countries over 2002-2010 and find robust support for these hypotheses.

Suggested Citation

Ehrlich, Isaac and Li, Dunli and Liu, Zhiqiang, The Role of Entrepreneurial Human Capital as a Driver of Endogenous Economic Growth (August 2017). NBER Working Paper No. w23728, Available at SSRN: https://ssrn.com/abstract=3027832

Isaac Ehrlich (Contact Author)

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Dunli Li

University College London ( email )

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Zhiqiang Liu

SUNY at Buffalo, College of Arts & Sciences, Department of Economics ( email )

Buffalo, NY 14260
United States

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