Entrepreneurship Capital and Economic Performance

Audretsch, David B.; Keilbach, Max

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Entrepreneurship Capital and Economic Performance

24 Pages Posted: 21 Jan 2003

See all articles by David B. Audretsch

David B. Audretsch

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

Max Keilbach

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics

There are 2 versions of this paper

Date Written: January 2003

Abstract

The neoclassical model of the production function, as applied by Robert Solow to build the neoclassical model of growth, linked labour and capital to output. More recently, Romer and others have expanded the model to include measures of knowledge capital. In this Paper we introduce a new factor, entrepreneurship capital, and link it to output in the context of a production function model. This Paper explains what is meant by entrepreneurship capital and why it should influence economic output. A production function model including several different measures of entrepreneurship capital is then estimated for German regions. The results indicate that entrepreneurship capital is a significant and important factor shaping output and productivity. These results suggest a new direction for policy that focuses on instruments to enhance entrepreneurship capital.

Keywords: Production function, entrepreneurship capital, regional economic performance

JEL Classification: M13, O32, O47

Suggested Citation: Suggested Citation

Audretsch, David B. and Keilbach, Max, Entrepreneurship Capital and Economic Performance (January 2003). Available at SSRN: https://ssrn.com/abstract=371801