To Be or Not to Be: The Entrepreneur in Endogenous Growth Theory

40 Pages Posted: 30 Mar 2021

See all articles by Magnus Henrekson

Magnus Henrekson

Research Institute of Industrial Economics (IFN)

Dan Johansson

Ratio Institute

Johan Karlsson

Jonkoping University - Jonkoping International Business School (JIBS)

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Date Written: March 29, 2021

Abstract

We examine the conceptualization of entrepreneurs in neo-Schumpeterian growth theory, which has reintroduced entrepreneurs into mainstream economics. Specifically, we analyze how neo-Schumpeterians relate to the contradiction between the entrepreneur-centered view of Schumpeter (1934) and the entrepreneurless framework of Schumpeter (1942), with the two frameworks entailing vastly different economic and policy implications. The analysis is based on a review of approximately 750 peer-reviewed articles over the period 1990–2018. The articles were identified using text mining methodology and supervised machine learning. The results show that the literature leans towards Schumpeter (1942); innovation returns are modeled as following an ex ante known probability distribution. By assuming that the outcomes of innovation activities are (probabilistically) deterministic, the Schumpeterian entrepreneur becomes redundant. In addition, the literature abstracts from genuine uncertainty, thus evading central issues regarding the economic function of the entrepreneur, especially with respect to disruptive innovations, ownership, and profits. To incorporate genuine uncertainty, the literature needs to adopt a broader conceptual foundation that goes beyond equilibrium modeling.

Keywords: creative destruction, economic growth, entrepreneur, innovation, judgment, bibliometric analysis, Knightian uncertainty

JEL Classification: O10, O3, B40

Suggested Citation

Henrekson, Magnus and Johansson, Dan and Karlsson, Johan, To Be or Not to Be: The Entrepreneur in Endogenous Growth Theory (March 29, 2021). IFN Working Paper No. 1385, Available at SSRN: https://ssrn.com/abstract=3814864

Magnus Henrekson (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

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Dan Johansson

Ratio Institute ( email )

P.O. Box 3203
SE-103 64 Stockholm
Sweden

Johan Karlsson

Jonkoping University - Jonkoping International Business School (JIBS) ( email )

Jönköping, 55111
Sweden

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