Working Paper: NBER ID: w28990
Authors: Tristan L. Botelho; Daniel Fehder; Yael Hochberg
Abstract: Entrepreneurship is thought to be a key driver of economic growth. While there are myriad forms of entrepreneurship, ranging from self-employment to small and medium size enterprises to technology- and innovation-driven startups, recent research provides evidence that the relationship between entrepreneurship and economic growth is driven not by overall quantity of new firm entry, but rather by a small subset of high-growth startups that are primarily categorized as innovation-driven. This paper provides a survey of the growing literature on the economics of such innovation-driven entrepreneurship. We begin by distinguishing between the various forms of entrepreneurship, which are often confounded in both theory and empirical work. We lay out the current state of knowledge, and describe the challenges faced by researchers in the field, particularly around measurement, data and identification. We conclude with an overview of the major open questions and directions for future research in the area.
Keywords: entrepreneurship; economic growth; innovation; high-growth startups
JEL Codes: O00; O03
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| innovation-driven entrepreneurship (IDE) (O35) | economic growth (O49) |
| high-growth startups (M13) | economic growth (O49) |
| innovation-driven entrepreneurship (IDE) (O35) | job creation (J68) |
| innovation-driven entrepreneurship (IDE) (O35) | productivity improvements (O49) |
| innovation-driven entrepreneurship (IDE) (O35) | skewness in growth rate distribution (D39) |
| traditional business entrepreneurs (TBE) (L26) | economic growth (O49) |