Entrepreneurship and Economic Growth: A Review and Synthesis of Conceptual Arguments and Empirical Evidence

Abstract

We review the literature on the nexus between entrepreneurship and economic growth and investigate the reasons for its inconclusive early findings. We trace them to the evolution of nations from the managed economies to the entrepreneurial economies and various discrepancies, both in the proxies used to measure entrepreneurship as well as in the settings within which this relationship has been explored. We also find that notwithstanding the continued assertion of a lack of empirical evidence on entrepreneurship-led economic growth, post-2004 research on the theme has fairly conclusively established the positivity of this relationship in the developed world and the persisting debate on this issue reflects just a lack of its awareness. We provide a synthesis of findings of the most recent research, discuss the unresolved issues, point to future research directions and analyse the implications of our findings for practice.