Small Bus Econ (2007) 29:351–382
DOI 10.1007/s11187-007-9074-x
What is the value of entrepreneurship? A review of recent
research
C. Mirjam van Praag Æ Peter H. Versloot
Accepted: 14 August 2007 / Published online: 25 September 2007
Ó Springer Science+Business Media, LLC 2007
Abstract This article examines to what extent recent
empirical evidence can collectively and systematically
substantiate the claim that entrepreneurship has important economic value. Hence, a systematic review is
provided that answers the question: What is the contribution of entrepreneurs to the economy in comparison to
non-entrepreneurs? We study the relative contribution of
entrepreneurs to the economy based on four measures
that have most widely been studied empirically. Hence,
we answer the question: What is the contribution of
entrepreneurs to (i) employment generation and dynamics, (ii) innovation, and (iii) productivity and growth,
relative to the contributions of the entrepreneurs’
counterparts, i.e., the ‘control group’? A fourth type of
contribution studied is the role of entrepreneurship in
increasing individuals’ utility levels. Based on 57 recent
C. M. van Praag (&)
Amsterdam Center for Entrepreneurship, Roetersstraat 11,
1018 WB Amsterdam, The Netherlands
e-mail: C.m.vanpraag@uva.nl
C. M. van Praag Á P. H. Versloot
University of Amsterdam, Amsterdam, The Netherlands
studies of high quality that contain 87 relevant separate
analyses, we conclude that entrepreneurs have a very
important—but specific—function in the economy.
They engender relatively much employment creation,
productivity growth and produce and commercialize
high-quality innovations. They are more satisfied than
employees. More importantly, recent studies show that
entrepreneurial firms produce important spillovers that
affect regional employment growth rates of all companies in the region in the long run. However, the
counterparts cannot be missed either as they...