Skip to main content
SpringerLink
Log in

An Innovation Policy Framework: Bridging the Gap Between Industrial Dynamics and Growth

  • Chapter
  • First Online:
Essays in Public Sector Entrepreneurship

Part of the book series: International Studies in Entrepreneurship ((ISEN,volume 34))

Abstract

Innovation is increasingly considered the key to elevating prosperity and securing sustainable long-term growth. The few last decades have also witnessed a refinement of previous growth models to include investments in education by individuals and R&D by firms. Better educated individuals and increased expenditure on R&D are shown to result in increased innovation and accelerated growth in endogenous growth models. This finding has spurred policy makers, most recently the OECD, the EU commission, and other organizations, to design innovation strategies to meet future growth and welfare challenges. Such strategies have also trickled down to the country level.

Financial support from Karl-Adam Bonniers Stiftelse, the Jan Wallander and Tom Hedelius Foundation, and the Marianne and Marcus Wallenberg Foundation is gratefully acknowledged. We are grateful for useful comments and suggestions on earlier versions of this paper from Bettina Peters, Scott Stern, and the participants at the ZEW Conference National Systems of Entrepreneurship in Mannheim, November 20–21, 2014.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
eBook
USD 16.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    Lerner (2009, p. 12).

  2. 2.

    As shown by Almeida and Kogut (1997) and Almeida (1999), small firms also innovate in relatively unexplored fields of technology. See also Rothwell and Zegveld (1982), Baumol (2004), and Ortega-Argilés et al. (2009).

  3. 3.

    Ample evidence from previous research also suggests that small and new firms provide most of the new jobs and terminate fewer employees than large firms in downturns and that a positive correlation exists between entrepreneurship/small firms and growth (e.g., Braunerhjelm et al. 2010; Thurik and Tessensohn 2012; Haltiwanger et al. 2013).

  4. 4.

    For a detailed account of the weaknesses in the theory building of endogenous growth models, see Braunerhjelm (2011). See also Antonelli (2007) on the “economics of complexity.”

  5. 5.

    The neo-Schumpeterian models define entrepreneurs either in a very rudimentary way or in a way in which they have a highly specific role, e.g., discovering the next pharmaceutical blockbuster (Aghion and Howitt 1992; Segerstrom 1991; Grossman and Helpman 1991).

  6. 6.

    See Aghion et al. (2013) for a survey.

  7. 7.

    See Orsenigo (2009) for a survey.

  8. 8.

    The seminal studies are Freeman (1987) and Lundvall (1992). The concept originates in List’s (1841) “national production systems.”

  9. 9.

    In his survey of the extensive research on SI, Carlsson (2007) shows that the overwhelming majority of studies address invention rather than innovation, and no more than 2–3 % of the studies surveyed discuss entrepreneurship. Less than 3 % of the SI studies address output criteria such as the effect on productivity, rate of growth, rate of innovation, and patenting.

  10. 10.

    See Gault (2013), Hall (2011), and OECD (2010) for reviews of the literature. Hall’s preferred measure of innovation is TFP growth.

  11. 11.

    Hung and Whittington (2011) are a partial exception, although their point is somewhat different. Hung and Whittington indicate that SI can become self-reproducing “systems of inertia,” which can sometimes be escaped through institutional entrepreneurship.

  12. 12.

    See Henrekson and Sanandaji (2014) and the references in Sanandaji (2011).

  13. 13.

    Recent research has documented that worker knowledge in the STEM fields is particularly important for economic growth. This result also holds for workers without a college degree. See Rothwell (2013) for an overview.

  14. 14.

    The evidence suggests that, in most cases, it is not advisable for faculty to become entrepreneurs. There are few cases where faculty have transitioned to an entrepreneurial career with great success (Åstebro et al. 2013). Instead, it is often preferable for former students to start firms and for faculty members to assume advisory positions in these firms.

  15. 15.

    The introduction of new ideas to and the (possible) subsequent development of the original innovations in large-scale businesses generally require two separate competencies (Baumol 2004).

  16. 16.

    To our knowledge, the idea concerning the importance of complementary competencies to generate growth was first recognized by Gunnar Eliasson (e.g., Eliasson 1996). Henrekson and Johansson (2009) explicitly use this framework to analyze the effects of a wide array of policies on high-growth firms (HGFs).

  17. 17.

    Three-fourths of all American entrepreneurs receiving VC funding ultimately get a zero rate of return (Hall and Woodward 2010).

  18. 18.

    Much has been written about the challenges and vagaries facing entrepreneurial firms and the high risks involved. See Gompers and Lerner (2001) for an easily accessible text.

  19. 19.

    For an in-depth analysis of the effects of incomplete contracts, see Bolton and Dewatripont (2005, Ch. 11).

  20. 20.

    Debt financing is problematic in this case, since firms have neither assets that can be used as collateral nor a positive cash flow. Asymmetric information and the tendency among entrepreneurs to overestimate the future prospects of their start-ups also contribute to the difficulties of obtaining bank financing.

  21. 21.

    See Lerner (2009) and Sandström et al. (2014) for a survey of the literature.

  22. 22.

    See Rodrik et al. (2004) and Levine (2005).

  23. 23.

    This section draws on Henrekson and Rosenberg (2001, section 1).

  24. 24.

    For an example, see Jacobsson et al. (2001) who document the slow response of the Swedish university system to the sharp increase in demand for training in electrical/electronic engineering and computer science in the 1970s and 1980s.

  25. 25.

    See, e.g., the discussion in OECD (1998).

  26. 26.

    See, e.g., Long (1982) and Pestieau and Possen (1991) for a discussion of tax evasion and choice of occupation. Robson and Wren (1999) conclude that the average tax rate affects evasion behavior.

  27. 27.

    A Swedish study estimates that the self-employed underreport their income by 30 % (Engström and Holmlund 2009).

  28. 28.

    A recent discussion of this effect is provided by Cullen and Gordon (2007). In practice, no tax system has full loss offset.

  29. 29.

    Certain assets are exempted from taxation in many countries, such as corporate wealth or pension savings, and the imputed value used as the basis for assessments is often based on arbitrary accounting rules. These rules may encourage (such as the corporate wealth exemption) or discourage (such as the pension savings exemption) investments in entrepreneurial activities. See Rosen (2005) for an overview.

  30. 30.

    These types of highly complicated estimates have been made for many countries using the methodology developed by King and Fullerton (1984).

  31. 31.

    Jorgenson and Landau (1993).

  32. 32.

    Rydqvist et al. (2014).

  33. 33.

    Henrekson and Johansson (2009).

  34. 34.

    See also Djankov et al. (2002), Desai et al. (2003), and Shleifer et al. (2008).

  35. 35.

    One exception is Cassiman et al. (2011) who show that participation in joint ventures is more conducive to innovation than labor mobility.

  36. 36.

    See Evans and Leighton (1989), Geroski (1989), Blundell et al. (1999), Nickell (1996), Hurst and Lusardi (2004), Djankov et al. (2007), Fiori et al. (2007), Gentry and Hubbard (2000), Nicoletti and Scarpetta (2003), Arnold et al. (2008), Ciccone and Papaioannou (2006), and Ardagna and Lusardi (2010).

  37. 37.

    These effects are quantified by Ardagna and Lusardi (2009). For example, the positive network effects are reduced by more than two-thirds.

  38. 38.

    See, e.g., Zucker et al. (1998) and Andersson et al. (2004).

  39. 39.

    See, e.g., Fujita et al. (1999) and Henderson and Thisse (2004).

  40. 40.

    See, e.g., Martin and Ottaviano (2001) and Agrawal et al. (2008).

  41. 41.

    Cited from www.whitehouse.gov/issues/economy/innovation (accessed November 1, 2014).

  42. 42.

    Cited from http://ec.europa.eu/research/innovation-union/index_en.cfm?pg=why (accessed November 1, 2014).

  43. 43.

    See Henrekson and Sanandaji (2016).

References

  • Acemoglu, D., & Johnson, S. (2012). Why nations fail. New York: Oxford University Press.

    Google Scholar 

  • Acs, Z. J., Audretsch, D. B., Braunerhjelm, P., & Carlsson, B. (2009). The knowledge spillover theory of entrepreneurship. Small Business Economics, 32(1), 15–30.

    Article  Google Scholar 

  • Acs, Z. J., Autio, E., & Szerb, L. (2014a). National systems of entrepreneurship: Measurement issues and policy implications. Research Policy, 43(3), 476–494.

    Article  Google Scholar 

  • Acs, Z. J., Autio, E., & Szerb, L. (2014b). Global entrepreneurship and development index 2014. Washington, DC: Global Entrepreneurship and Development Institute.

    Google Scholar 

  • Aghion, P., & Howitt, P. (1992). A model of growth through creative destruction. Econometrica, 60(2), 323–351.

    Article  Google Scholar 

  • Aghion, P., Blundell, R., Griffith, R., Howitt, P., & Prantl, S. (2006). The effects of entry on incumbent innovation and productivity. Review of Economics and Statistics, 91(1), 20–32.

    Google Scholar 

  • Aghion, P., & Griffith, R. (2005). Competition and growth: Reconciling theory and evidence. Cambridge, MA: MIT Press.

    Google Scholar 

  • Aghion, P., Akcigit, U., & Howitt, P. (2013). What do we learn from Schumpeterian growth theory? (CESIS Working Paper No. 298). Stockholm: CESIS—Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology (KTH).

    Google Scholar 

  • Agrawal, A., Kapur, D., & McHail, J. (2008). How do spatial and social proximity influence knowledge flows? Evidence from patent data. Journal of Urban Economics, 64(2), 258–269.

    Article  Google Scholar 

  • Almeida, P., & Kogut, B. (1997). The exploration of technological diversity and the geographic localization of innovation. Small Business Economics, 9(1), 21–31.

    Google Scholar 

  • Almeida, P. (1999). Small firms and economic growth. In Z. J. Acs, B. Carlsson, & A. R. Thurik (Eds.), Small business in the modern economy. Oxford: Blackwell.

    Google Scholar 

  • Andersen, T. M., & Svarer, M. (2007). Flexicurity: Labour market performance in Denmark. CESifo Economic Studies, 53(3), 389–429.

    Article  Google Scholar 

  • Andersson, M., Braunerhjelm, P., & Thulin, P. (2012). Entrepreneurs, creative destruction and production: Entry by type, sector and sequence. Journal of Entrepreneurship and Public Policy, 1(2), 125–146.

    Google Scholar 

  • Andersson, M., & Thulin, P. (2008). Globalisering, arbetskraftens rörlighet och produktivitet (Research report 23, Globalization Council). Stockholm: Ministry of Education.

    Google Scholar 

  • Andersson, R., Quigley, J., & Wilhelmsson, M. (2004). University decentralization as regional policy: The Swedish experiment. Journal of Economic Geography, 4(4), 371–388.

    Article  Google Scholar 

  • Antonelli, C. (2007). The path dependent complexity of localized technological change: Ingredients, governance and processes. London: Routledge.

    Google Scholar 

  • Ardagna, S., & Lusardi, A. (2009). Heterogeneity in the effect of regulation on entrepreneurship and entry size (NBER Working Paper No. 15510). Cambridge, MA: National Bureau of Economic Research (NBER).

    Google Scholar 

  • Ardagna, S., & Lusardi, A. (2010). Explaining international differences in entrepreneurship: The role of individual characteristics and regulatory constraints. In J. Lerner & A. Schoar (Eds.), International differences in entrepreneurship. Chicago: University of Chicago Press.

    Google Scholar 

  • Arnold, J., Nicoletti, G., & Scarpetta, S. (2011). Regulation, resource reallocation and productivity growth. In H. Strauss (Ed.), Productivity and growth in Europe: Long-term trends, current challenges and the role of economic dynamism (EIB Papers, Vol. 11(1), pp. 90–115). Luxemburg: European Investment Bank.

    Google Scholar 

  • Arnold, J., Nicoletti, G., & Scarpetta, S. (2008). Regulation, allocative efficiency and productivity in OECD countries: Industry and firm-level evidence (OECD Economics Department Working Paper No. 616). Paris: OECD.

    Google Scholar 

  • Åstebro, T., Braunerhjelm, P., & Broström, A. (2013). Does academic entrepreneurship pay? Industrial and Corporate Change, 22(1), 281–311.

    Article  Google Scholar 

  • Autor, D. H., Kerr, W. R., & Kugler, A. D. (2007). Do employment protections reduce productivity? Evidence from U.S. states (NBER Working Paper No. 12860). Cambridge, MA: National Bureau of Economic Research (NBER).

    Google Scholar 

  • Bain, J. (1956). Barriers to new competition, their character and consequences in manufacturing industries. Cambridge, MA: Harvard University Press.

    Book  Google Scholar 

  • Barro, R. J. (1999). Human capital and growth in cross-country regressions. Swedish Economic Policy Review, 6(2), 237–277.

    Google Scholar 

  • Bartelsman, E., Haltiwanger, J., & Scarpetta, S. (2004). Microeconomic evidence of creative destruction in industrial and developing countries. World Bank, Policy Research Working Paper No. 3464.

    Google Scholar 

  • Bassanini, A., Nunziata, L., & Venn, D. (2009). Job protection legislation and productivity growth in OECD countries. Economic Policy, 24(58), 349–402.

    Google Scholar 

  • Baumol, W. J. (2002). The free-market innovation machine. Princeton, NJ: Princeton University Press.

    Book  Google Scholar 

  • Baumol, W. J. (2004). Entrepreneurial enterprises, large established firms and other components of the free-market growth machine. Small Business Economics, 23(1), 9–23.

    Article  Google Scholar 

  • Baumol, W. J. (2010). The microtheory of innovative entrepreneurship. Princeton, NJ: Princeton University Press.

    Google Scholar 

  • Béchard, J.-P., & Grégoire, D. (2005). Entrepreneurship education research revisited: The case of higher education. Academy of Management Learning and Education, 4(1), 22–43.

    Article  Google Scholar 

  • Berry, S., & Pakes, A. (2003). Empirical models of entry and market structure. In R. Schmalensee & R. Willig (Eds.), Handbook of industrial organization. Amsterdam: North Holland.

    Google Scholar 

  • Bessen, J., & Maskin, E. (2009). Sequential innovation, patents, and imitation. RAND Journal of Economics, 40(4), 611–635.

    Article  Google Scholar 

  • Blundell, R., Griffith, R., & Van Reenen, J. (1999). Market share, market value and innovation in a panel of British manufacturing firms. Review of Economic Studies, 66(3), 529–544.

    Article  Google Scholar 

  • Bolton, P., & Dewatripont, M. (2005). Contract theory. Cambridge, MA: MIT Press.

    Google Scholar 

  • Bosma, N. S., & Harding, R. (2007). Global entrepreneurship monitor: GEM 2006 summary results. Babson Park, MA: Babson College.

    Google Scholar 

  • Bosma, N. S., & Levie, J. (Eds.). (2010). Global entrepreneurship monitor 2009 executive report. Babson Park, MA: Babson College.

    Google Scholar 

  • Braunerhjelm, P. (Ed.). (2010). En innovationsstrategi för Sverige. Swedish Economic Forum Report 2010. Stockholm: Entreprenörskapsforum.

    Google Scholar 

  • Braunerhjelm, P. (2011). Entrepreneurship, innovation and economic: Growth interdependencies, irregularities and regularities. In D. B. Audretsch, O. Falck, & S. Heblich (Eds.), Handbook of innovation and entrepreneurship. Cheltenham, UK and Northampton, MA: Edward Elgar.

    Google Scholar 

  • Braunerhjelm, P. (2012). Innovation and growth. In M. Andersson, B. Johansson, & H. Lööf (Eds.), Innovation and growth: From R&D strategies of innovating firms to economy-wide technological change. Oxford: Oxford University Press.

    Google Scholar 

  • Braunerhjelm, P., Acs, Z. J., Audretsch, D. B., & Carlsson, B. (2010). The missing link: Knowledge diffusion and entrepreneurship in endogenous growth. Small Business Economics, 34(2), 105–125.

    Article  Google Scholar 

  • Braunerhjelm, P., Ding, D., & Thulin, P. (2014). Does labor mobility foster innovation? The case of Sweden. Mimeo, presented at the Schumpeter Conference, Jena.

    Google Scholar 

  • Caballero, R. J. (2007). Specificity and the macroeconomics of restructuring. Cambridge, MA: MIT Press.

    Google Scholar 

  • Caballero, R. J., & Hammour, M. (2000). Creative destruction and development: Institutions, crises and restructuring (NBER Working Paper No. 7849). Cambridge, MA: National Bureau of Economic Research (NBER).

    Google Scholar 

  • Carlsson, B. (2007). Innovation systems: A survey of the literature from a Schumpeterian perspective. In H. Hanusch & A. Pyka (Eds.), Elgar companion to neo-Schumpeterian economics. Cheltenham, UK: Edward Elgar.

    Google Scholar 

  • Carlsson, B., Acs, Z. J., Audretsch, D. B., & Braunerhjelm, P. (2009). Knowledge creation, entrepreneurship, and economic growth: A historical review. Industrial and Corporate Change, 18(6), 1193–1229.

    Article  Google Scholar 

  • Carree, M., & Thurik, A. R. (2010). The impact of entrepreneurship on economic growth. In Z. J. Acs & D. B. Audretsch (Eds.), Handbook of entrepreneurship research. New York: Springer.

    Google Scholar 

  • Cassiman, B., Veugelers, R., & Arts, S. (2011). Tracing the effect of links between science and industry: The role of researcher interaction and mobility between firms and research organizations. IESE Working Paper. Navarra: IESE Business School.

    Google Scholar 

  • Chetty, R., & Saez, E. (2005). Dividend taxes and corporate behavior: Evidence from the 2003 dividend tax cut. Quarterly Journal of Economics, 120(3), 791–833.

    Google Scholar 

  • Ciccone, A., & Papaioannou, E. (2006). Red tape and delayed entry (CEPR Discussion Paper 5996). London: Centre for Economic Policy Research (CEPR).

    Google Scholar 

  • Coase, R. H. (1960). The problem of social cost. Journal of Law and Economics, 3(October), 1–44.

    Article  Google Scholar 

  • Cullen, J. B., & Gordon, R. H. (2007). Taxes and entrepreneurial risk-taking: Theory and evidence in the U.S. Journal of Public Economics, 91(7–8), 1479–1505.

    Article  Google Scholar 

  • Cumming, D. (2005). Agency costs, institutions, learning, and taxation in venture capital contracting. Journal of Business Venturing, 20(5), 573–622.

    Article  Google Scholar 

  • Da Rin, M., Nicodano, G., & Sembenelli, A. (2006). Public policy and the creation of active venture capital markets. Journal of Public Economics, 90(8), 1699–1723.

    Article  Google Scholar 

  • Davis, S. J., & Henrekson, M. (1999). Explaining national differences in the size and industry distribution of employment. Small Business Economics, 12(1), 59–83.

    Article  Google Scholar 

  • De Soto, H. (2000). The mystery of capital: Why capitalism triumphs in the west and fails everywhere else. New York: Basic Books.

    Google Scholar 

  • Delgado, M., Porter, M. E., & Stern, S. (2014). Clusters, convergence, and economic performance. Research Policy, 43(10), 1785–1799.

    Article  Google Scholar 

  • Denison, E. F. (1968). Measuring the economic contribution of education and the ‘residual’ to economic growth. In J. Bowman (Ed.), Readings in the economics of education. Paris: UNESCO.

    Google Scholar 

  • Desai, M., Gompers, P., & Lerner, J. (2003). Institutions, capital constraints and entrepreneurial firm dynamics: Evidence from Europe (NBER Working Paper No. 10165). Cambridge, MA: National Bureau of Economic Research (NBER).

    Google Scholar 

  • Djankov, S., La Porta, R., Lopes de Silanes, F., & Schleifer, A. (2002). The regulation of entry. Quarterly Journal of Economics, 117(1), 1–37.

    Article  Google Scholar 

  • Djankov, S., McLiesh, C., & Shleifer, A. (2007). Private credit in 129 countries. Journal of Financial Economics, 84(2), 299–329.

    Article  Google Scholar 

  • Domar, E. D., & Musgrave, R. A. (1944). Proportional income taxation and risk-taking. Quarterly Journal of Economics, 48(3), 388–422.

    Article  Google Scholar 

  • Dosi, G. (1982). Technological paradigms and technological trajectories. A suggested interpretation of the determinants and directions of technical change. Research Policy, 11(3), 147–162.

    Google Scholar 

  • Edquist, C. (2011). Design of innovation policy through diagnostic analysis: Identification of systemic problems (or failures). Industrial and Corporate Change, 20(6), 1–29.

    Article  Google Scholar 

  • Ejermo, O. (2009). Regional innovation measured by patent data—Does quality matter? Industry and Innovation, 16(2), 141–165.

    Article  Google Scholar 

  • Eliasson, G. (1996). Firm objectives, controls and organization: The use of information and the transfer of knowledge within the firm. Dordrecht: Kluwer Academic Publishers.

    Google Scholar 

  • Engström, P., & Holmlund, B. (2009). Tax evasion and self-employment in a high-tax country: Evidence from Sweden. Applied Economics, 41(19), 2419–2430.

    Google Scholar 

  • Evans, D. S., & Leighton, L. S. (1989). Some empirical aspects of entrepreneurship. American Economic Review, 79(3), 519–535.

    Google Scholar 

  • Feldman, M. (1994). The geography of innovations. Dordrecht: Kluwer Academic Publishers.

    Google Scholar 

  • Feldman, M., Hadjimichael, T., Kemeny, T., & Lanahan, L. (2015). The logic of economic development: A definition and model for investment. Environment and Planning C: Government and Policy, in press.

    Google Scholar 

  • Feldman, M. P., & Audretsch, D. B. (1999). Innovation in cities: Science-based diversity, specialization and localized competition. European Economic Review, 43(2), 409–429.

    Article  Google Scholar 

  • Fenn, G., Liang, N., & Prowse, S. (1995). The economics of the private equity market. Washington, DC: Board of Governors of the Federal Reserve System.

    Google Scholar 

  • Fiori, G., Nicoletti, G., Scarpetta, S., & Schiantarelli, F. (2007). Employment outcomes and the interactions between product and labor market deregulation: Are they substitutes or complements? (Working Paper No. 663). Boston: Boston College.

    Google Scholar 

  • Fonseca, R., Lopez-Garcia, P., & Pissarides, C. A. (2001). Entrepreneurship, start-up costs and employment. European Economic Review, 45(4–6), 692–705.

    Article  Google Scholar 

  • Fonseca, R., Michaud, P.-C., & Sopraseuth, T. (2007). Entrepreneurship, wealth, liquidity constraints and start-up costs. Comparative Labor Law & Policy Journal, 28(4), 637–674.

    Google Scholar 

  • Freeman, C. (1987). Technology policy and economic performance: Lessons from Japan. London: Pinter.

    Google Scholar 

  • Freeman, R. B., Swedenborg, B., & Topel, R. (2010). Introduction. In R. B. Freeman, B. Swedenborg, & R. Topel (Eds.), Reforming the welfare state: Recovery and beyond. Chicago: University of Chicago Press.

    Chapter  Google Scholar 

  • Fujita, M., Krugman, P. R., & Venables, A. J. (1999). The spatial economy: Cities, regions and international trade. Cambridge, MA: MIT Press.

    Google Scholar 

  • Gault, F. (2013). Innovation indicators and measurement: An overview. In F. Gault (Ed.), Handbook of innovation indicators and measurement (pp. 3–37). Cheltenham, UK: Edward Elgar.

    Google Scholar 

  • Gentry, W. M., & Hubbard, R. G. (2000). Tax policy and entrepreneurial entry. American Economic Review, 90(2), 283–287.

    Article  Google Scholar 

  • Geroski, P. (1989). Entry, innovation and productivity growth. Review of Economics and Statistics, 71(4), 572–578.

    Article  Google Scholar 

  • Gertler, M. S. (2004). Manufacturing culture: The institutional geography of industrial practice. Oxford: Oxford University Press.

    Google Scholar 

  • Gilbert, R. J., & Newbery, D. M. G. (1982). Preemptive patenting and the persistence of monopoly. American Economic Review, 72(3), 514–526.

    Google Scholar 

  • Gilson, R. J., & Schizer, D. M. (2003). Understanding venture capital structure: A tax explanation for convertible preferred stock. Harvard Law Review, 116(3), 874–916.

    Article  Google Scholar 

  • Glaeser, E. L., & Kerr, W. R. (2009). Local industrial conditions and entrepreneurship: How much of the spatial distribution can we explain? Journal of Economics and Management Strategy, 18(3), 623–633.

    Article  Google Scholar 

  • Glaeser, E. L., & Maré, D. C. (2001). Cities and skills. Journal of Labor Economics, 19(2), 316–342.

    Article  Google Scholar 

  • Glaeser, E. L., & Gottlieb, J. D. (2009). The wealth of cities: Agglomeration and spatial equilibrium in the United States (NBER Working Paper No. 14806). Cambridge, MA: National Bureau of Economic Research (NBER).

    Google Scholar 

  • Gompers, P. A., & Lerner, J. (2001). The money of invention: How venture capital creates new wealth. Cambridge, MA: Harvard Business School Press.

    Google Scholar 

  • Gordon, R. J. (2004). Why was Europe left at the station when America’s productivity locomotive departed? (NBER Working Paper No. 10661). Cambridge, MA: National Bureau of Economic Research (NBER).

    Google Scholar 

  • Gross, D. M., & Ryan, M. (2008). FDI location and size: Does employment protection legislation matter? Regional Science and Urban Economics, 38(6), 590–605.

    Article  Google Scholar 

  • Grossman, G., & Helpman, E. (1991). Quality ladders in the theory of growth. Review of Economic Studies, 58(1), 43–61.

    Article  Google Scholar 

  • Halabisky, D., Dreessen, E., & Parsley, C. (2006). Growth in firms in Canada, 1985–1999. Journal of Small Business and Entrepreneurship, 19(3), 255–268.

    Article  Google Scholar 

  • Hall, B. H. (2011). Using productivity growth as an innovation indicator. Report for the High Level Panel on Measuring Innovation. Brussels: DG Research, European Commission.

    Google Scholar 

  • Hall, R. E., & Woodward, S. E. (2010). The burden of the nondiversifiable risk of entrepreneurship. American Economic Review, 100(3), 1163–1194.

    Article  Google Scholar 

  • Haltiwanger, J., Jarmin, R. S., & Miranda, C. (2013). Who creates jobs? Small versus large versus young. Review of Economics and Statistics, 95(2), 347–361.

    Article  Google Scholar 

  • Henderson, J. V., & Thisse, J. F. (Eds.). (2004). Handbooks of regional and urban economics. Amsterdam: Elsevier.

    Google Scholar 

  • Henrekson, M., & Johansson, D. (2009). Competencies and institutions fostering high-growth firms. Foundations and Trends in Entrepreneurship, 5(1), 1–82.

    Article  Google Scholar 

  • Henrekson, M., & Rosenberg, N. (2001). Designing efficient institutions for science-based entrepreneurship: Lessons from the U.S. and Sweden. Journal of Technology Transfer, 26(3), 207–231.

    Article  Google Scholar 

  • Henrekson, M., & Sanandaji, T. (2014). Small business activity does not measure entrepreneurship. Proceedings of the National Academy of Sciences of the United States of America, 111(5), 1760–1765.

    Article  Google Scholar 

  • Henrekson, M., & Sanandaji, T. (2016). Owner-level taxes and business activity. Foundations and Trends in Entrepreneurship, forthcoming.

    Google Scholar 

  • Holcombe, R. G. (2003). The origins of entrepreneurial opportunities. Review of Austrian Economics, 16(1), 25–43.

    Article  Google Scholar 

  • Hoti, S., McAleer, M., & Slottje, D. (2006). Intellectual property litigation in the USA. Journal of Economic Surveys, 20(4), 715–729.

    Article  Google Scholar 

  • Howitt, P. (2007). Innovation, competition and growth: A Schumpeterian perspective on Canada’s economy. C.D. Howe Institute Commentary 246, Toronto.

    Google Scholar 

  • Huizinga, H., Laeven, L., & Nicodeme, G. (2008). Capital structure and international debt shifting. Journal of Financial Economics, 88(1), 80–118.

    Article  Google Scholar 

  • Hung, S.-C., & Whittington, R. (2011). Agency in national innovation systems: Institutional entrepreneurship and the professionalization of Taiwanese IT. Research Policy, 40(4), 526–538.

    Article  Google Scholar 

  • Hurst, E., & Lusardi, A. (2004). Liquidity constraints, household wealth and entrepreneurship. Journal of Political Economy, 112(2), 319–347.

    Article  Google Scholar 

  • Inklaar, R., Timmer, M. P., & van Ark, B. (2008). Market services productivity across Europe and the US. Economic Policy, 23(53), 139–194.

    Article  Google Scholar 

  • Jacobsson, S., Sjöberg, C., & Wahlström, M. (2001). Alternative specifications of the institutional constraint to economic growth—Or why is there a shortage of computer and electronic engineers and scientists in Sweden? Technology Analysis and Strategic Management, 13(2), 179–193.

    Article  Google Scholar 

  • Javorcik, B. S., Özden, Ç., Spatareanu, M., & Neagu, C. (2006). Migrant networks and foreign direct investment (World Bank Policy Research Working Paper No. 4654). Washington, DC: World Bank

    Google Scholar 

  • Jones, C. I. (1995). R&D-based models of economic growth. Journal of Political Economy, 103(4), 759–784.

    Article  Google Scholar 

  • Jones, C. I. (2011). Intermediate goods and weak links in the theory of economic development. American Economic Journal: Macroeconomics, 3(2), 1–28.

    Google Scholar 

  • Jorgenson, D. W., & Landau, R. (Eds.). (1993). Tax reform and the cost of capital: An international comparison. Washington, DC: Brookings.

    Google Scholar 

  • Kaiser, U., Kongsted, H. C., & Rønde, T. (2011). Labor mobility, social network effects, and innovative activity (IZA Discussion Paper No. 5654). Bonn: Institute for the Study of Labor (IZA).

    Google Scholar 

  • Kim, J., & Marschke, G. (2005). Labor mobility of scientists, technological diffusion, and the firm’s patenting decision. RAND Journal of Economics, 36(2), 298–317.

    Google Scholar 

  • King, M. A., & Fullerton, D. (1984). The taxation of income from capital: A comparative study of the United States, the United Kingdom, Sweden and West Germany. Chicago: University of Chicago Press.

    Book  Google Scholar 

  • Klapper, L., & Love, I. (2011). Entrepreneurship and development: The role of information asymmetries. World Bank Economic Review, 25(3), 448–455.

    Article  Google Scholar 

  • Klienknecht, A. (1989). Firm size and innovation. Small Business Economics, 1(3), 215–222.

    Article  Google Scholar 

  • Knight, F. H. (1921). Risk, uncertainty and profit. Boston: Houghton Mifflin.

    Google Scholar 

  • Kugler, A., & Pica, G. (2008). Effects of employment protection on worker and job flows: Evidence from the 1990 Italian reform. Labour Economics, 15(1), 78–95.

    Article  Google Scholar 

  • Kuratko, D. (2005). The emergence of entrepreneurship education: Development, trends, and challenges. Entrepreneurship: Theory & Practice, 29(5), 577–597.

    Google Scholar 

  • Laffont, J.-J., & Tirole, J. (1993). A theory of incentives and regulation. Cambridge, MA: MIT Press.

    Google Scholar 

  • Lazear, E. P. (2005). Entrepreneurship. Journal of Labor Economics, 23(4), 649–680.

    Article  Google Scholar 

  • Lerner, J. (2009). Boulevard of broken dreams: Why public efforts to boost entrepreneurship and venture capital have failed—And what to do about it. Princeton, NJ: Princeton University Press.

    Book  Google Scholar 

  • Levine, R. (2005). Finance and growth: Theory and evidence. In P. Aghion & S. Durlauf (Eds.), Handbook of economic growth. Amsterdam: Elsevier.

    Google Scholar 

  • List, F. (1841). Das nationale system der politischen ökonomie. Basel: Kyklos [English translation: (1841), The national systems of political economy, London: Longmans, Green and Co.].

    Google Scholar 

  • Long, J. E. (1982). Income taxation and the allocation of market labour. Journal of Labor Research, 3(3), 259–276.

    Article  Google Scholar 

  • Lööf, H., & Nabavi, P. (2012). Increasing return to smart cities. Working Paper Series in Economics and Institutions of Innovation. Stockholm: CESIS—Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology (KTH).

    Google Scholar 

  • Lundvall, B.-Å. (1992). National systems of innovation: Towards a theory of innovation and interactive learning. London, UK: Pinter.

    Google Scholar 

  • Malerba, F., & Orsenigo, L. (1996). The dynamics and evolution of industries. Industrial and Corporate Change, 5(1), 51–87.

    Article  Google Scholar 

  • Malerba, F., & Orsenigo, L. (2000). Knowledge, innovation activities and industrial evolution. Industrial and Corporate Change, 9(2), 289–313.

    Article  Google Scholar 

  • Martin, J. P., & Scarpetta, S. (2012). Setting it right: Employment protection, labour reallocation and productivity. De Economist, 160(2), 89–116.

    Article  Google Scholar 

  • Martin, P., & Ottaviano, G. (2001). Growth and agglomeration. International Economic Review, 42(4), 947–968.

    Article  Google Scholar 

  • Micco, A., & Pagés, C. (2006). The economic effects of employment protection: Evidence from international industry-level data (IZA Discussion Paper No. 2433). Bonn: Institute for the Study of Labor (IZA).

    Google Scholar 

  • Michaelas, N., Chittenden, F., & Poutziouris, P. (1999). Financial policy and capital structure choice in UK SMEs: Empirical evidence from company panel data. Small Business Economics, 12(2), 113–130.

    Article  Google Scholar 

  • Misher, N. (1984, July). Tax consequences of exercising an incentive stock option with stock of the granting corporation. The Tax Executive, 357–363.

    Google Scholar 

  • Nelson, R. R., & Winter, S. G. (1982). An evolutionary theory of economic change. Cambridge: Cambridge University Press.

    Google Scholar 

  • Nickell, S. J. (1996). Competition and corporate performance. Journal of Political Economy, 104(4), 724–746.

    Article  Google Scholar 

  • Nicoletti, G., & Scarpetta, S. (2003). Regulation, productivity and growth: OECD evidence. Economic Policy, 18, 11–72.

    Article  Google Scholar 

  • North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • OECD (1998). Fostering entrepreneurship. Paris: OECD.

    Book  Google Scholar 

  • OECD (2010). The OECD innovation strategy: Getting a head start on tomorrow. Paris: OECD.

    Google Scholar 

  • Orsenigo, L. (2009). Clusters and clustering in biotechnology: Stylised facts, issues and theories. In P. Braunerhjelm & M. P. Feldman (Eds.), Cluster genesis. Oxford: Oxford University Press.

    Google Scholar 

  • Ortega-Argilés, R., Vivarelli, M., & Voight, P. (2009). R&D in SMEs: A paradox? Small Business Economics, 33(1), 3–11.

    Article  Google Scholar 

  • Paci, R., & Usai, S. (1999). Externalities, knowledge spillovers and the spatial distribution of innovation. GeoJournal, 49(4), 381–390.

    Article  Google Scholar 

  • Peltzman, S. (1976). Toward a more general theory of regulation. Journal of Law and Economics, 19(2), 211–240.

    Article  Google Scholar 

  • Pestieau, P., & Possen, U. M. (1991). Tax evasion and occupational choice. Journal of Public Economics, 45(1), 105–125.

    Article  Google Scholar 

  • Pigou, A. C. (1938). The economics of welfare (4th ed.). London: Macmillan.

    Google Scholar 

  • Porter, M. (1998). On competition. Boston: Harvard Business School Press.

    Google Scholar 

  • Poschke, M. (2010). The regulation of entry and aggregate productivity. Economic Journal, 120(549), 1175–1200.

    Article  Google Scholar 

  • Poschke, M. (2013). Who becomes an entrepreneur? Labor market prospects and occupational choice. Journal of Economic Dynamics and Control, 37(3), 693–710.

    Article  Google Scholar 

  • Powell, W. W., Koput, K. W., & Smith-Doerr, L. (1996). Interorganizational collaboration and the locus of innovation: Networks of learning in biotechnology. Administrative Science Quarterly, 41(1), 116–145.

    Article  Google Scholar 

  • Puga, D. (2010). The magnitude and causes of agglomeration economies. Journal of Regional Science, 50(1), 203–219.

    Article  Google Scholar 

  • Robson, M. T., & Wren, C. (1999). Marginal and average tax rates and the incentive for self-employment. Southern Economic Journal, 65(4), 757–773.

    Google Scholar 

  • Rodrik, D., Subramanian, A., & Trebbi, F. (2004). Institutions rule: The primacy of institutions over geography and integration in economic development. Journal of Economic Growth, 9(2), 131–165.

    Article  Google Scholar 

  • Romer, P. M. (1986). Increasing returns and long-run growth. Journal of Political Economy, 94(5), 1002–1038.

    Article  Google Scholar 

  • Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5), S71–S102.

    Article  Google Scholar 

  • Rosen, H. S. (2005). Entrepreneurship and taxation: Empirical evidence. In V. Kanniainen & C. Keuschnigg (Eds.), Venture capital, entrepreneurship and public policy. Cambridge, MA: MIT Press.

    Google Scholar 

  • Rosenberg, N. (2000). American universities as endogenous institutions. Ch. 3 in Schumpeter and the endogeneity of technology: Some American perspectives. London: Routledge.

    Book  Google Scholar 

  • Rosenthal, S. S., & Strange, W. C. (2008). The attenuation of human capital spillovers. Journal of Urban Economics, 64(2), 373–389.

    Article  Google Scholar 

  • Rothwell, J. (2013). The hidden STEM economy: The Metropolitan Policy Program at Brookings. Washington, DC: Brookings.

    Google Scholar 

  • Rothwell, R., & Zegveld, W. (1982). Innovation and the small and medium-sized firm. London: Pinter.

    Google Scholar 

  • Rydqvist, K., Spizman, J., & Strebulaev, I. (2014). Government policy and ownership of equity securities. Journal of Financial Economics, 111(1), 70–85.

    Article  Google Scholar 

  • Sanandaji, T. (2011). Essays in entrepreneurship policy (PhD Dissertation in Public Policy). Chicago: Irving B. Harris Graduate School of Public Policy Studies, University of Chicago.

    Google Scholar 

  • Sandström, C., Wennberg, K., Wallin, M., & Zherlygina, Y. (2014). Public policy for academic entrepreneurship: A review and critical discussion. Mimeo, Royal Institute of Technology and Stockholm School of Economics

    Google Scholar 

  • Saxenian, A. (1994). Regional advantage: Culture and competition in Silicon Valley and Route 128. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Scarpetta, S., & Tressel, T. (2004). Boosting productivity via innovation and adoption of new technologies: Any role for labor market institutions? (World Bank Policy Research Working Paper No. 29144). Washington, DC: World Bank.

    Google Scholar 

  • Scherer, F. M. (1965). Firm size, market structure, opportunity and the output of patented innovations. American Economic Review, 55(5), 1097–1125.

    Google Scholar 

  • Schmidt, R. H., & Spindler, G. (2002). Path dependence, corporate governance and complementarity. International Finance, 5(3), 311–333.

    Article  Google Scholar 

  • Segerstrom, P. (1991). Innovation, imitation and economic growth. Journal of Political Economy, 99(4), 807–827.

    Article  Google Scholar 

  • Shleifer, A., Lopes-de-Silanes, F., & La Porta, R. (2008). Economic consequences of legal origins. Journal of Economic Literature, 46(2), 285–332.

    Article  Google Scholar 

  • Sinn, H. W. (1996). Social insurance, incentives and risk taking. International Tax and Public Finance, 3(3), 259–280.

    Article  Google Scholar 

  • Solow, R. M. (1957). Technical change and the aggregate production function. Review of Economics and Statistics, 39(3), 312–320.

    Google Scholar 

  • Song, J., Almeida, P., & Wu, G. (2003). Learning–by–hiring: When is mobility more likely to facilitate interfirm knowledge transfer? Management Science, 49(4), 351–365.

    Article  Google Scholar 

  • Stigler, G. J. (1971). The theory of economic regulation. Bell Journal of Economics and Management Science, 2(1), 3–21.

    Article  Google Scholar 

  • Thurik, A. R., & Tessensohn, T. (2012). The relationship between different kinds of nascent entrepreneurship and the business cycle. In P. Braunerhjelm (Ed.), Entrepreneurship norms and the business cycle. Stockholm: Swedish Entrepreneurship Forum.

    Google Scholar 

  • Tullock, G. (1969). A simple algebraic logrolling model. American Economic Review, 60(3), 419–426.

    Google Scholar 

  • Wennekers, S., & Thurik, A. R. (1999). Linking entrepreneurship and economic growth. Small Business Economics, 13(1), 27–55.

    Article  Google Scholar 

  • Winter, S. G. (1964). Economic ‘natural selection’ and the theory of the firm (LEM Chapters Series). Yale Economic Essays, 225–272.

    Google Scholar 

  • Winter, S. G. (1984). Schumpeterian competition in alternative technological regimes. Journal of Economic Behavior and Organization, 5(3–4), 287–320.

    Article  Google Scholar 

  • Wolfe, D. A., & Gertler, M. S. (2006). Local antecedents and trigger events: Policy implications of path dependence for cluster formation. In P. Braunerhjelm & M. Feldman (Eds.), Cluster genesis: Technology-based industrial development. Oxford: Oxford University Press.

    Google Scholar 

  • Zucker, L. G., Darby, M. R., & Brewer, M. B. (1998). Intellectual human capital and the birth of U.S. biotechnology enterprises. American Economic Review, 88(1), 290–306.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Swedish Entrepreneurship Forum and Department of Industrial Economics and Management, KTH Royal Institute of Technology, Grevgatan 34, 114 53, Stockholm, Sweden

    Pontus Braunerhjelm

  2. Research Institute of Industrial Economics (IFN), 55665, 102 15, Stockholm, Sweden

    Magnus Henrekson

Authors
  1. Pontus Braunerhjelm
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Magnus Henrekson
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Magnus Henrekson .

Editor information

Editors and Affiliations

  1. Indiana University, School of Public & Environmental Affairs, BLOOMINGTON, Indiana, USA

    David B. Audretsch

  2. University of North Carolina at Greensbo, Greensboro, North Carolina, USA

    Albert N. Link

Rights and permissions

Reprints and permissions

Copyright information

© 2016 Springer International Publishing Switzerland

About this chapter

Cite this chapter

Braunerhjelm, P., Henrekson, M. (2016). An Innovation Policy Framework: Bridging the Gap Between Industrial Dynamics and Growth. In: Audretsch, D., Link, A. (eds) Essays in Public Sector Entrepreneurship. International Studies in Entrepreneurship, vol 34. Springer, Cham. https://doi.org/10.1007/978-3-319-26677-0_4

Download citation

Publish with us

Policies and ethics

Search

Navigation