April 2012

IZA DP No. 6513: Entrepreneurship in Advanced and Developing Countries: A Microeconomic Perspective

published as 'Is entrepreneurship necessarily good? Microeconomic evidence from developed and developing countries' in: Industrial and Corporate Change, 2013, 22, 1453-1495

The purpose of this paper is to provide a contribution to the identification of the role of entrepreneurship in economic growth by mapping out: 1) alternative ways of looking at entrepreneurship, distinguishing 'creative destruction' from simple 'turbulence'; 2) the different microeconomic determinants of new firm formation, distinguishing 'progressive' from 'regressive' drivers; 3) the relationship between ex-ante characteristics (of the founder) and post-entry performance (of the new firm); and 4) the possible scope for an economic policy aimed at maximizing the impact of entrepreneurship on economic growth. Where possible and appropriate, throughout the paper particular attention is devoted to the specific features characterizing entrepreneurship in developing countries.