Public policy spanning a broad range of contexts, ranging from the European Union, to states, cities and local communities around the globe, has turned to entrepreneurship to provide the engine for ...economic growth, competitiveness in globally linked markets, and jobs. This book explains why entrepreneurship has emerged as a bona fide instrument of growth policy. The knowledge spillover theory of entrepreneurship suggests that entrepreneurship provides a crucial mechanism in the process of economic growth by serving as a conduit for knowledge spillovers. Investments in new knowledge and ideas may not automatically spill over and result in commercialization, as has typically been assumed in models of economic growth. Rather, the existence of what is introduced as the knowledge filter impedes the spillover and commercialization of investments in new ideas and knowledge. By penetrating the knowledge filter and facilitating the spillover of knowledge that might otherwise not be commercialized, entrepreneurship provides the missing link to economic growth. This new focus of entrepreneurship as a conduit transmitting the spillover of knowledge generates a series of theoretical propositions, involving not just the impact of entrepreneurship on economic performance and growth, but also the very nature of entrepreneurship. The theoretical propositions range from positing that entrepreneurial opportunities are not exogenously given but rather endogenously and systematically created by investments in new knowledge and ideas, to the importance of geographic proximity between entrepreneurial activity and knowledge sources, the impact of location on entrepreneurial performance, and the new roles for board, managers and modes of finance in entrepreneurial firms accessing and absorbing knowledge spillovers. These propositions are subjected to systematic econometric scrutiny and verification using both aggregate data to analyze the links between entrepreneurship and growth, as well as firm-level data to analyze the impact of knowledge spillover on entrepreneurial location, performance, boards, managers and mode of finance. The resulting empirical evidence supports the knowledge spillover of entrepreneurship not only by linking entrepreneurship to economic growth and performance, but also by identifying how the organization and strategy of entrepreneurial firms are influenced by the need to access, absorb and commercialize external knowledge spillovers. The book concludes that the new millennium may not be so much about the process of Joseph Schumpeter's creative destruction, where entrepreneurial startups displace and ultimately drive incumbent company's out of business, but rather characterized by creative construction. Globalization and its concomitant outsourcing and offshoring is the source of the "destruction", especially in terms of lower skilled jobs. By contrast, in the 21st century global economy, entrepreneurship is constructive by commercializing investments in knowledge and ideas that might never have been commercialized but ultimately result in growth, global competitiveness and employment. Thus, the emergence of entrepreneurship policy can be interpreted as the attempt to generate entrepreneurial based economic growth by creating an entrepreneurial economy. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/economicsfinance/0195183517/toc.html
The knowledge paradox suggests that high levels of investment in new knowledge do not necessarily and automatically generate the anticipated levels of competitiveness of growth. In particular, ...knowledge investments do not automatically translate into balanced growth and competitiveness. The purpose of this paper is to explain why knowledge investments are inherently unbalanced, so that the competitiveness and growth ensuing from knowledge are not equally spread across individuals, firms, and spatial units of observation, such as regions and countries. Based on a data set linking entrepreneurial activity to growth within the context of German regions, this paper shows that entrepreneurship serves a conduit of knowledge spillovers.
The prevailing theories of entrepreneurship have typically revolved around the ability of individuals to recognize opportunities and then to act on them by starting a new venture. This has generated ...a literature asking why entrepreneurial behaviour varies across individuals with different characteristics while implicitly holding constant the external context in which the individual finds herself. Thus, where the opportunities come from, or the source of entrepreneurial opportunities, is also implicitly taken as given. By contrast, in this paper an important source of entrepreneurial opportunities is identified – knowledge and ideas created in an incumbent organization. By commercializing knowledge that otherwise would remain uncommercialized through the start‐up of a new venture, entrepreneurship serves as a conduit of knowledge spillovers. According to the theory of knowledge spillover entrepreneurship, a context with more knowledge will generate more entrepreneurial opportunities. By contrast, a context with less knowledge will generate fewer entrepreneurial opportunities. Based on a data set linking entrepreneurship to the knowledge context, empirical evidence is provided that is consistent with the proposition that entrepreneurial opportunities are not exogenous but rather systematically created by investments in knowledge by incumbent organizations.
We analyze the impact of venture capital finance on growth and innovation of young German firms. On the basis of statistical matching procedures we confirm findings that venture-funded firms have a ...higher number of patent applications than those in the control group. However, these are obtained even before the venture capitalists' investment, hence venture capitalists choose firms with demonstrated innovative output. After investment, the number of firms' patents does not differ significantly anymore, however their growth rates are significantly larger. This suggests that the higher innovativeness of venture-funded firms is due to the selection process of the venture capitalist prior to the funding rather than to the venture funding itself. Venture capitalists seem to focus rather on commercialization of existing innovations and growth of the firm.
In this paper, we develop two hypotheses: First, regional innovation efforts have a positive impact on regional knowledge based entrepreneurial activity. Second, knowledge based entrepreneurship ...positively affects regional economic performance. We test these hypotheses using county level data from West Germany, employing a structural equation model to analyze the relationships between latent variables. Our empirical analysis provides evidence supporting both hypotheses. In particular, our results suggest that innovation efforts have an
indirect effect on economic performance via entrepreneurship. This indirect effect is neglected in existing empirical studies focusing on the
direct effect of innovation on economic performance.
Audretsch D. B. and Keilbach M. (2004) Entrepreneurship capital and economic performance, Regional Studies38, 949-959. The neoclassical model of the production function, as applied by Solow when ...building 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. This paper introduces a new factor, entrepreneurship capital, and links it to output in the context of a production function model. It 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. The results suggest a new direction for policy that focuses on instruments to enhance entrepreneurship capital. Audretsch D. B. et Keilbach M. (2004) Le capital entrepreneurial et la performance économique, Regional Studies38, 949-959. Le modèle néo-classique de la fonction de production selon Solow, qui l'a employé dans le but de construire le modèle néo- classique de croissance, relie le travail et le capital au rendement. Plus récemment, Romer, parmi d'autres, a développé le modèle afin de comporter des mesures du capital de connaissance. Cet article cherche à présenter un noveau facteur, le capital entrepreneurial, et à le relier au rendement économique sur la base d'un modèle de fonction de production. D'abord, cet article cherche à expliquer la notion du capital entrepreneurial et les raisons pour lesquelles il pourrait influencer le rendement économqiue. Il s'ensuit une estimation d'un modèle de fonction de production qui se rapporte aux régions allemandes et qui utlise differents mesures du capital entrepreneurial. Les résultats montrent que le capital entrepreneurial excerce un effet positif et signifiant sur le rendement économique des regions. Ces résultats laissent supposer une nouvelle orientation pour la politique qui porte sur des outils destinés à augmenter le capital entrepreneurial. Audrestsch D. B. und Keilbach M. (2004) Entrepreneurship Kapital und wirtschaftliche Leistungsfähigkeit, Regional Studies38, 949-959. Das neoklassische Modell der Produktionsfunktion, wie es von Solow zur Konstruktion des neoklassischen Wachstumsmodell benutzt wurde, verband Arbeit und Kapital mit wirtschaftlichem Output. In jüngster Zeit haben Romer und andere das Modell dahingehend erweitert, dass Wissenskapital einbezogen wird. In diesem Aufsatz wird ein weiterer Faktor eingeführt, der des Entrepreneurship Kapitals und die Produktionsfunktion mit diesem Faktor erweitert. Der Aufsatz erklärt zunächst, was mit Entrepreneurship Kapital gemeint ist, und inwiefern es den wirtschaftlichen Output einer Region beeinflussen kann. Es wird sodann ein Produktionsfunktionsmodell einschließlich mehrerer verschiedener Maße für Entrepreneurship Kapital für deutsche Regionen geschätzt. Die Ergebnisse weisen darauf hin, dass Entrepreneurship Kapital einen signifikanten und wichtigen Beitrag zur Beeinflussung des wirtschaftlichen Outputs der Regionen darstellt. Die Ergebnisse legen nahe, neue Wege der Wirtschaftspolitik zu beschreiten, die sich auf Instrumente zur Erhöhung des Entrepreneurship Kapitals konzentrieren. Audretsch D. B. y Keilbach M. (2004) Capital entrepreneurial y comportamiento económico, Regional Studies38, 949-959. El modelo neoclásico de la función de producción, tal como ha sido aplicado por Solow para desarrollar el modelo neoclásico de crecimiento, vinculó trabajo y capital a producción. Más recientemente, Romer y otros han expandido el modelo para incluír medidas de capital intelectual. En este artículo nosotros introducimos un nuevo factor, el capital empresarial, y lo vinculamos a la producción en el contexto de un modelo de función de producción. Este artículo explica qué es a lo que nosotros nos referimos cuando hablamos de capital empresarial y por qué debería influír en la producción económica. A continuación se estima un modelo de función de producción que incluye varias medidas diferentes de capital empresarial para las regiones alemanas. Los resultados indican que el capital empresarial es un factor importante y significativo a la hora de determinar producción y productividad. Estos resultados sugieren una nueva dirección para las políticas que se centran en instrumentos dirigidos a aumentar el capital empresarial.
This paper introduces the concept of entrepreneurship capital and links it to the economic performance of regions. We give a definition of entrepreneurship capital and suggest different measures of ...this variable. Economic performance of regions is measured by the stock and the growth rate of regions, labor productivity. We find that entrepreneurship capital is stronger in urban areas and spatially correlated. Using regressions of production functions and growth equations, we find evidence that entrepreneurship capital has a positive and large impact on region's labor productivity. However for growth, this result holds only for risk-oriented measures of entrepreneurship capital and for densely populated regions. We derive policy implications from these findings. PUBLICATION ABSTRACT
. Whereas initially physical capital and later, knowledge capital were viewed as crucial for growth, more recently a very different factor, entrepreneurship capital, has emerged as a driving force ...of economic growth. In this paper, we define a region's capacity to create new firms start‐ups as the region's entrepreneurship capital. We then investigate the local embeddedness of this variable and which variables have an impact on this variable. Using data for Germany, we find that knowledge‐based entrepreneurship capital is driven by local levels of knowledge creation and the acceptance of new ideas, indicating that local knowledge flows play an important role. Low‐tech entrepreneurship capital is rather increased by regional unemployment and driven by direct incentives such as subsidies. All three measures are locally clustered, indicating that indeed, entrepreneurship capital is a phenomenon that is driven by local culture, and is therefore locally bounded.
. Mientras que inicialmente el capital físico, y posteriormente el capital conocimiento, fue considerado crucial para el crecimiento, más recientemente un factor muy diferente, el capital empresarial de espíritu emprendedor (entrepreneurship capital), ha surgido como una fuerza impulsora de crecimiento económico. En este artículo, definimos como capital empresarial emprendedor la capacidad de una región para originar la puesta en marcha de nuevas empresas. A continuación investigamos el arraigo local de esta variable y las variables que tienen un impacto sobre esta variable. Usando datos de Alemania, hallamos que el capital empresarial emprendedor basado en el conocimiento está motivado por niveles locales de creación de conocimiento y la aceptación de nuevas ideas, indicando que los flujos de conocimiento local juegan un papel importante. El capital empresarial emprendedor basado en bajas tecnologías aumenta con el desempleo regional y está motivado por incentivos directos como subsidios. Las tres variables están agrupadas localmente (locally clustered), indicando que sin duda el capital empresarial emprendedor es un fenómeno motivado por la cultura local, y por tanto atribuible a una localidad.
We investigate the determinants of firms' choices between different modes of vertical cooperation for innovation. Based on survey data on German innovating firms, we state that informal cooperation ...is both, more prevalent and more important than formal cooperation. We only find weak empirical evidence for the relevance of incoming knowledge spillovers for formal as well as for informal cooperation. In contrast, a firm's ability to protect its proprietary innovations, i.e., to limit outgoing knowledge spillovers, has a positive effect on a firm's propensity to engage in formal and informal cooperation at the same time. It does not affect, however, the probability of cooperating informally alone. Large firms, firms that operate a R&D department and firms that are involved in costly R&D projects tend to cooperate formally. Moreover, continuous R&D, which may reflect firms' absorptive capacities, and the innovation dynamics at the industry level do have a positive impact on vertical cooperations in general.
We suggest a structural model that specifies firm growth as a function of firm-specific parameters, market-specific parameters, and competition for purchasing power. The model distinguishes between ...two firm innovation strategies: exploration and exploitation. On the basis of a set of simulations of this model, we derive a number of empirically testable hypotheses. A subset of these have already found support in the empirical literature. We take these as evidence in favor of the explanatory power of the model. In addition, we are able to derive further testable propositions on the interaction of firm-demographic processes, innovative behavior and market structure that go beyond the existing literature and that we suggest for further research. We conclude that the approach chosen here provides a fruitful pathway for further research.
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