The Missing Link: The Knowledge Filter and Entrepreneurship in Endogenous Growth

42 Pages Posted: 8 Mar 2005

See all articles by Zoltan J. Acs

Zoltan J. Acs

Schar School of Policy and Government

David B. Audretsch

Indiana University - Institute for Development Strategies; King Saud University; WHU - Otto Beisheim School of Management; Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

Pontus Braunerhjelm

Royal Institute of Technology (KTH) - Department of Infrastructural and Urban Planning (INFRA); Örebro University - Swedish Entrepreneurship Forum

Bo Carlsson

Case Western Reserve University - Department of Economics

Date Written: December 2004

Abstract

The intellectual breakthrough contributed by the new growth theory was the recognition that investments in knowledge and human capital endogenously generate economic growth through the spillover of knowledge. Endogenous growth theory does not explain how or why spillovers occur. The missing link is the mechanism converting knowledge into economically relevant knowledge. This Paper develops a model that introduces a filter between knowledge and economic knowledge and identifies entrepreneurship as a mechanism that reduces the knowledge filter. A cross-country regression analysis over the period 1981-2001 provides empirical support for the model. We conclude that public policies facilitating knowledge spillovers through entrepreneurship may be an important new approach to promoting economic growth.

Keywords: Endogenous growth, knowledge, innovation, entrepreneurship

JEL Classification: L10, O10

Suggested Citation

Acs, Zoltan J. and Audretsch, David B. and Braunerhjelm, Pontus and Carlsson, Bo, The Missing Link: The Knowledge Filter and Entrepreneurship in Endogenous Growth (December 2004). CEPR Discussion Paper No. 4783. Available at SSRN: https://ssrn.com/abstract=667944

Zoltan J. Acs

Schar School of Policy and Government ( email )

Founders Hall
3351 Fairfax Dr.
Arlington, VA 22201
United States
703-993-1780 (Phone)

HOME PAGE: http://home.ubalt.edu/zacs

David B. Audretsch (Contact Author)

Indiana University - Institute for Development Strategies ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States
812-855-6766 (Phone)
812-855-0184 (Fax)

King Saud University ( email )

Riyadh, 11451
Saudi Arabia

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

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

1315 East Tenth Street
Bloomington, IN 47405
United States

Pontus Braunerhjelm

Royal Institute of Technology (KTH) - Department of Infrastructural and Urban Planning (INFRA) ( email )

SE-100 44 Stockholm
Sweden
+46 8 790 9114 (Phone)
+46 8 411 7436 (Fax)

Örebro University - Swedish Entrepreneurship Forum ( email )

Södra Kungstornet
Kungsgatan 33, 7tr
Stockholm, 11156
Sweden

Bo Carlsson

Case Western Reserve University - Department of Economics ( email )

Cleveland, OH 44106
United States

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