Measuring Entrepreneurship: Do Established Metrics Capture Schumpeterian Entrepreneurship?

Reprint No. 2020:43

Author(s): Magnus Henrekson and Tino SanandajiYear: 2020 Title: Entrepreneurship Theory and Practice Volume (No.): 44 (4) Pages: 733–760
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Measuring Entrepreneurship: Do Established Metrics Capture Schumpeterian Entrepreneurship? Magnus Henrekson and Tino Sanandaji

We compile four hand-collected measures of high-impact Schumpeterian entrepreneurship (venture capital-funded IPOs, self-made billionaire entrepreneurs, unicorn start-ups, and young top global firms founded by individual entrepreneurs) and six measures dominated by small business activity as well as institutional and economic variables for 64 countries. Factor analysis reveals that a great deal of the variation is accounted for by two distinct factors: one relating to high-impact Schumpeterian entrepreneurship and the other relating to small business activity. Except for the World Bank measure of firm registration of limited liability companies, quantity-based measures tend to be inappropriate proxies for high-impact Schumpeterian entrepreneurship.

Henrekson, Magnus and Tino Sanandaji (2020), "Measuring Entrepreneurship: Do Established Metrics Capture Schumpeterian Entrepreneurship?". Entrepreneurship Theory and Practice 44(4), 733–760.

Magnus Henrekson


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