Entrepreneurial innovation and economic growth
A fast growing empirical literature identifies an important role of entrepreneurs for productivity growth. This paper develops a simple overlapping-generations framework with endogenous occupational choice and productivity-enhancing entrepreneurial innovation. It shows that introducing these basic features into R&D-based growth theory has important implications. First, an equilibrium with price-taking firms can be supported despite a constant returns to scale production technology, once entrepreneurial human capital is accounted for. Second, in the proposed model, a larger size of the workforce capable to conduct R&D neither affects the long-run rate of economic growth ("strong scale effect") nor per capita income or welfare ("weak scale effect"). Economic growth is sustained in the long-run and may be policy-dependent.
Year of publication: |
2009
|
---|---|
Authors: | Grossmann, Volker |
Published in: |
Journal of Macroeconomics. - Elsevier, ISSN 0164-0704. - Vol. 31.2009, 4, p. 602-613
|
Publisher: |
Elsevier |
Keywords: | Endogenous growth Entrepreneurial skills Occupational choice Price-taking Scale effects |
Saved in:
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