The global technology frontier: productivity growth and the relevance of Kirznerian and Schumpeterian entrepreneurship

  • Esteban LafuenteEmail author
  • Zoltan J. Acs
  • Mark Sanders
  • László Szerb


We evaluate how country-level entrepreneurship—measured via the national system of entrepreneurship—triggers total factor productivity (TFP) by increasing the effects of Kirznerian and Schumpeterian entrepreneurship. Using a database for 45 developed and developing countries during 2002–2013, we employ non-parametric techniques to build a world technology frontier and compute TFP estimates. The results of the common factor models reveal that the national system of entrepreneurship is a relevant conduit of TFP, and that this effect is heterogeneous across countries. Policies supporting Kirznerian entrepreneurship—e.g., increased business formation rates—may promote the creation of low value-adding businesses which is not associated with higher TFP rates. Policy interventions targeting Schumpeterian entrepreneurship objectives—e.g., innovative entrepreneurship and the development of new technologies—are conducive to technical change by promoting upward shifts in the countries’ production function and, consequently, productivity growth.


National system of entrepreneurship Total factor productivity Technical change Parameter heterogeneity Common factor model International 

JEL codes

C23 E23 L26 M13 O1 



Esteban Lafuente acknowledges financial support by the Spanish Ministry of Economy, Industry and Competitiveness (grant no. ECO2017-86305-C4-2-R). Mark Sanders received financial support from the European Union through the Horizon2020 project “Financial and Institutional Reforms to build an Entrepreneurial Society” (FIRES) (grant no. 649378). László Szerb acknowledges financial support by the Higher Education Institutional Excellence Program of the Hungarian Ministry of Human Capacities, within the framework of the 4th thematic program ‘Enhancing the Role of Domestic Companies in the Reindustrialization of Hungary’ of the University of Pécs (reference number of the contract: 20765-3/2018/FEKUTSTRAT); and by the Hungarian National Foundation for Scientific Research (project: OTKA-K-120289 titled ‘Entrepreneurship and competitiveness investigations in Hungary based on the Global Entrepreneurship Monitor surveys 2017-2019’).


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Authors and Affiliations

  1. 1.Department of ManagementUniversitat Politècnica de Catalunya (BarcelonaTech) EPSEBBarcelonaSpain
  2. 2.Schar School of Policy and GovernmentGeorge Mason UniversityArlingtonUSA
  3. 3.Utrecht University School of EconomicsUtrechtThe Netherlands
  4. 4.Faculty of Business and EconomicsUniversity of PécsPécsHungary

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