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Small Business Economics

, Volume 41, Issue 4, pp 775–795 | Cite as

Knowledge spillover entrepreneurship in an endogenous growth model

  • Zoltan J. Acs
  • Mark W. J. L. Sanders
Article

Abstract

We present a model that separates entrepreneurship from profit-motivated corporate R&D aimed at improving existing production processes. Our model embeds the core idea of the knowledge spillover theory of entrepreneurship in established knowledge-based growth models by enriching their knowledge spillover structure. Introducing knowledge spillovers drives a wedge between the optimal and market allocation of resources between new knowledge creation and commercialization. We show the first best allocation depends exclusively on the relative strength of knowledge spillovers between them and derive propositions to guide policy that can bring the market equilibrium closer to this optimum.

Keywords

Innovation rents Endogenous growth R&D Entrepreneurship Incentives Knowledge spillovers 

JEL Classifications

L26 O31 O33 O41 R58 

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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.School of Public PolicyGeorge Mason UniversityArlingtonUSA
  2. 2.Utrecht School of EconomicsUtrecht UniversityUtrechtThe Netherlands

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