Working Paper: CEPR ID: DP4783
Authors: Zoltán J. Ács; David B. Audretsch; Pontus Braunerhjelm; Bo Carlsson
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; entrepreneurship; innovation; knowledge
JEL Codes: L10; O10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| thinner knowledge filter (D83) | more efficient conversion of knowledge (O36) |
| entrepreneurship (M13) | economically useful knowledge (D89) |
| economically useful knowledge (D89) | economic growth (O49) |
| entrepreneurship (M13) | economic growth (O49) |
| entrepreneurship (M13) | exploitation of knowledge (O36) |
| exploitation of knowledge (O36) | economic growth (O49) |
| entrepreneurial skills (M13) | economic growth (O49) |