The Contribution of Entrepreneurship to Economic Growth

  • Max Keilbach
  • Mark Sanders
Part of the International Studies in Entrepreneurship book series (ISEN, volume 19)

It has long been recognized that the entrepreneurial function is a vital component in the process of economic growth.

William J. (Baumol, 1968, p. 65)

1.1 Introduction

1.1.1 The Economic Function of Entrepreneurship

When Baumol (1968) made the above observation he went on to lament that economic theory to that day systematically ignored the entrepreneur and something should be done about that. Now, 40 years later, there are few economists that would deny the importance of the entrepreneur in modern, innovative and growing economies. But as a recent survey by Bianchi and Henrekson (2005) has shown, widespread sympathy and recognition has not led to a successful entry in mainstream economic models of growth and innovation. One possible reason for this is the multitude of functions that entrepreneurs have been proposed to perform in capitalist economies.

Walras (1874) (and later Kirzner, 1973) considered the function of the entrepreneur as seeking arbitrage opportunities. As such, the...


Quality Improvement Steady State Level Entrepreneurial Activity Knowledge Spillover Average Quality 
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Copyright information

© Springer Science + Business Media, LLC 2009

Authors and Affiliations

  • Max Keilbach
    • 1
  • Mark Sanders
    • 2
  1. 1.Max Planck Institute for EconomicsJenaGermany
  2. 2.Utrecht School of EconomicsUtrechtThe Netherlands

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