Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81312
Authors: 
Douhan, Robin
Henrekson, Magnus
Year of Publication: 
2008
Series/Report no.: 
IFN Working Paper 761
Abstract: 
Recent research has highlighted the role of institutions in channeling entrepreneurs into activities with positive or negative effects on overall productivity. Embedding central elements from these theories into a political economy framework reveals the bilateral causal relation between entrepreneurs and institutions. Core features of the entrepreneur force us to view its effects on institutions as more than mechanic general equilibrium adjustments. Three analytically separate channels of influence are isolated, analyzed and exemplified. Entrepreneurs influence formal economic institutions through direct involvement in politics, by using their entrepreneurial talent to wield de facto political power and by altering the effect of formal institutions. We propose a parsimonious framework that incorporates these effects as well as the role of institutions in channeling entrepreneurial talent. We use examples from modern history as a real-world context to illustrate our framework.
Subjects: 
Entrepreneurship
Innovation
Institutions
Regulation
Self-employment
JEL: 
L50
M13
O31
P14
Document Type: 
Working Paper

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