Skip to main content
Log in

Entrepreneurship in macroeconomics

  • Symposium
  • Published:
Annals of Finance Aims and scope Submit manuscript

Abstract

This paper reviews the main studies on entrepreneurship conducted during the past two decades that are relevant for the understanding of various macroeconomic issues. I organize the discussion by distinguishing three groups of contributions. The first group includes studies whose main purpose is to understand the factors that affect the decision to become an entrepreneur. The second group includes studies that look at the aggregate and distributional implications of entrepreneurship for savings and investment. The third group deals with issues of economic development and growth.

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

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  • Aghion P., Bolton P.: A theory of trickle-down growth and development. Rev Econ Stud 64(2), 151–172 (1997)

    Article  Google Scholar 

  • Aiyagari S.R.: Uninsured idiosyncratic risk and aggregate saving. J Econ CIX(3, 659–84 (1994)

    Google Scholar 

  • Akyol, A., Athreya, K.: Unsecured credit and selfemployment. York University and Federal Reserve Bank of Richmond (2007, unpublished manuscript)

  • Amaral, P.S., Quintin, E.: Financial intermediation and economic development: a quantitative assessment. Southern Methodist University and Federal Reserve Bank of Dallas (2007, unpublished manuscript)

  • Angeletos G.M.: Uninsured idiosyncratic investment risk and aggregate saving. Rev Econ Dyn 10(1), 1–30 (2007)

    Article  Google Scholar 

  • Angeletos G.M., Calvet L.E.: Idiosyncratic production risk, growth and the business cycle. J Monet Econ 53(6), 1095–1115 (2006)

    Article  Google Scholar 

  • Antunes A., Cavalcanti T., Villamil A.: The effect of financial repression and enforcement on entrepreneurship and development. J Monet Econ 55(2), 278–297 (2008)

    Article  Google Scholar 

  • Banerjee A.V., Newman A.F.: Risk-bearing and the theory of income distribution. Rev Econ Stud 58(2), 211–235 (1991)

    Article  Google Scholar 

  • Banerjee A.V., Newman A.F.: Occupational choice and the process of development. J Polit Econ 101(2), 274–298 (1993)

    Article  Google Scholar 

  • Basaluzzo, G.: Entrepreneurial teams in financially constrained economies. ITAM Mexico (2006, unpublished manuscript)

  • Blanchflower, D.G.: Minority self-employment in the United States and the impact of affirmative action programs. Ann Finance (2008, this issue)

  • Blanchflower D.G., Oswald A.J.: What makes an entrepreneur? J Labor Econ 16(1), 26–60 (1998)

    Article  Google Scholar 

  • Bohacek R.: Financial constraints and entrepreneurial investment. J Monet Econ 53(8), 2195–2212 (2006)

    Article  Google Scholar 

  • Buera, F.J.: A dynamic model of entrepreneurship with borrowing constraints: theory and evidence. Northwestern University (2007, unpublished manuscript)

  • Buera, F.J., Kaboski, J.P., Shin, Y.: Finance and development: a tale of two sectors. Northwestern University and University of Wisconsin (2007, unpublished manuscript)

  • Buera, F.J., Shin, Y.: Financial frictions and the persistence of history: a quantitative exploration. Northwestern University and University of Wisconsin (2007, unpublished manuscript)

  • Cagetti, M., DeNardi, M.: Taxation, entrepreneurship, and wealth. Federal Reserve Bank of Minneapolis Staff Report no. 340 (2004)

  • Cagetti M., DeNardi M.: Entrepreneurship, frictions and wealth. J Polit Econ 114(5), 835–870 (2006)

    Article  Google Scholar 

  • Carroll C.D.: Buffer-stock saving and the life cycle/permanent income hypothesis. Q J Econ CXII 1, 1–56 (1997)

    Article  Google Scholar 

  • Carroll, C.D.: Why do the rich save so much? NBER Working Paper No W6549 (1998)

  • Caselli, F., Gennaioli, N.: Dynastic management. London School of Economics and University of Stockholm (2005, unpublished manuscript)

  • Castaneda A., Díaz-Giménez J., Ríos-Rull J.V.: Accounting for the U.S. earnings and wealth inequality. J Polit Econ 111(4), 818–857 (2003)

    Article  Google Scholar 

  • Castro R., Clementi G., MacDonald G.: Investor protection, optimal incentives, and economic growth. Q J Econ 119(3), 1131–1175 (2004)

    Article  Google Scholar 

  • Clemens, C.: Status concerns and occupational choice under uncertainty. BE J Theor Econ Adv Theor Econ, 6(1), Article 4 (2006)

    Google Scholar 

  • Clemens C., Heinemann M.: On the effects of redistribution on growth and entrepreneurial risk-taking. J Econ 88(2), 131–158 (2006)

    Article  Google Scholar 

  • Covas F.: Uninsured idiosyncratic production risk with borrowing constraints. J Econ Dyn Control 30(11), 2167–2190 (2006)

    Article  Google Scholar 

  • Erosa A.: Financial intermediation and occupational choice in development. Rev Econ Dyn 4(2), 303–334 (2001)

    Article  Google Scholar 

  • Evans D.S., Jovanovic B.: An estimated model of entrepreneurial choice under liquidity constraints. J Polit Econ 97(4), 808–827 (1989)

    Article  Google Scholar 

  • Evans D.S., Leighton S.L.: Some empirical aspects of entrepreneurship. Am Econ Rev 79(3), 519–535 (1989)

    Google Scholar 

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

    Google Scholar 

  • Gentry, W.M., Hubbard, R.G.: Entrepreneurship and household saving. Berkeley Electronic Press, Adv Econ Anal Policy 4(1) (2004)

  • Ghatak M., Morelli M., Sjostrom T.: Occupational choice and dynamic incentives. Rev Econ Stud 68(4), 781–810 (2001)

    Article  Google Scholar 

  • Gine X., Townsend R.M.: Evaluation of financial liberalization: a model with constrained occupation choice. J Dev Econ 74(2), 269–307 (2004)

    Article  Google Scholar 

  • Gollin, D.: Nobodys business but my own: self employment and small enterprise in economic development. J Monet Econ (2006, forthcoming)

  • Hamilton B.H.: Does entrepreneurship pay? An empirical analysis of the returns to self-employment. J Polit Econ 108(3), 604–631 (2000)

    Article  Google Scholar 

  • Herranz, N., Krasa, S., Villamil, A.P.: The impact of entrepreneur characteristics and bankruptcy rules on firm performance. University of Illinois (2007, unpublished manuscript)

  • Holtz-Eakin D., Joulfaian D., Rosen H.S.: Sticking it out: entrepreneurial survival and liquidity constraints. J Polit Econ 102(1), 53–75 (1994)

    Article  Google Scholar 

  • Hopenhayn, H., Vereshchagina, G.: Risk taking by entrepreneurs. Rochester Center for Economic Research, Working Paper No. 500 (2003)

  • Huggett M.: The risk free rate in heterogeneous-agents, incomplete markets economies. J Econ Dyn Control 17(5/6), 953–970 (1993)

    Article  Google Scholar 

  • Huggett M.: Wealth distribution in life-cycle economies. J Monet Econ 38(3), 469–494 (1996)

    Article  Google Scholar 

  • Hurst E., Lusardi A.: Liquidity constraints, household wealth, and entrepreneurship. J Polit Econ 112(2), 319–347 (2004)

    Article  Google Scholar 

  • Jeong H., Townsend R.M.: Sources of tfp growth: occupational choice and financial deepening. Econ Theory 32(1), 179–221 (2007)

    Article  Google Scholar 

  • King R.G., Levine R.: Finance, entrepreneurship and growth: theory and evidence. J Monet Econ 32(4), 513–542 (1993)

    Article  Google Scholar 

  • Kitao S.: Entrepreneurship, taxation and capital investment. Rev Econ Dyn 11(1), 44–69 (2008)

    Google Scholar 

  • Li W.: Entrepreneurship and government subsidies: a general equilibrium analysis. J Econ Dyn Control 26(11), 1815–1844 (2000)

    Article  Google Scholar 

  • Meh C.A.: Entrepreneurship, wealth inequality, and taxation. Rev Econ Dyn 8(3), 688–719 (2005)

    Article  Google Scholar 

  • Meh C.A., Quadrini V.: Endogenous incomplete markets with investment risks. J Econ Dyn Control 30(11), 2143–2165 (2006)

    Article  Google Scholar 

  • Meh, C., Terajima, Y.: Personal bankruptcy and entrepreneurship. Bank of Canada (2007, unpublished manuscript)

  • Moskiwitz T.J., Vissing-Jorgensen A.: The returns to entrepreneurial investment: a private equity premium puzzle? Am Econ Rev 92(4), 745–778 (2002)

    Article  Google Scholar 

  • Pastor L., Veronesi P.: Was there a nasdaq bubble in the late 1990s? J Finance Econ 81(1), 61–100 (2006)

    Article  Google Scholar 

  • Paulson A., Townsend R.M.: Entrepreneurship and financial constraints in thailand. J Corp Finance 10(2), 229–326 (2004)

    Article  Google Scholar 

  • Piketty T.: The dynamics of the wealth distribution and the interest rate with credit rationing. Rev Econ Stud 64(2), 173–189 (1997)

    Article  Google Scholar 

  • Quadrini V., Ríos-Rull J.-V.: Understanding the U.S. distribution of wealth. Q Rev Fed Reserv Bank Minneap 21(2), 22–36 (1997)

    Google Scholar 

  • Quadrini V.: The importance of entrepreneurship for wealth concentration and mobility. Rev Income Wealth 45(1), 1–19 (1999)

    Article  Google Scholar 

  • Quadrini V.: Entrepreneurship, saving and social mobility. Rev Econ Dyn 3(1), 1–40 (2000)

    Article  Google Scholar 

  • Quintin, E.: Limited enforcement and the organization of production. J Macroecon (2000, forthcoming)

  • Schmitz J.A.: Imitation, entrepreneurship and long-run growth. J Polit Econ 97(3), 721–739 (1989)

    Article  Google Scholar 

  • Schumpeter J.A.: The Theory of Economic Development. Harvard University Press, Cambridge, MA (1934)

    Google Scholar 

  • Terajima, Y.: Education and self-employment: Changes in earnings and wealth inequality. Bank of Canada Working Paper, No. 2006-40 (2006)

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Vincenzo Quadrini.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Quadrini, V. Entrepreneurship in macroeconomics. Ann Finance 5, 295–311 (2009). https://doi.org/10.1007/s10436-008-0105-7

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10436-008-0105-7

Keywords

JEL Classification

Navigation