Decoupling Entrepreneurship Capital from Capital Stock

Abstract

Per capita real gross domestic product adjusted for purchasing power parity (G) is parsimoniously explained by capitalism (C), democracy (D) and rule of law(R). G is estimated from a CDR index equal to the vector inner (dot) product of global invariant parameters [1.53 0.14 0.23 -1.21] and country specific [C D R C·D·R]. The data a re for year 2014 and 79 countries that represent practically all people in the world. C is measured by total capitalization then split into human capital of entrepreneurship imagination and creativity and capital stock of knowledge, machines, computers, training, recording devices etc. The contribution of entrepreneurship to G is found to be 6 times that of capital stock.

JEL Classification: E02, P16