Working Paper No. 1270

Measuring Entrepreneurship: Do Established Metrics Capture High-Impact Schumpeterian Entrepreneurship?

Published: April 3, 2019Pages: 45Keywords: Billionaire entrepreneurs; High-impact entrepreneurship; Innovation; Institutions; Schumpeterian entrepreneurship; Self-employment  JEL-codes: L5; M13; O31; P14

Measuring Entrepreneurship: Do Established Metrics Capture High-Impact Schumpeterian Entrepreneurship? Magnus Henrekson and Tino Sanandaji


Are quantitative measures driven by small business activity also valid proxies for high-impact Schumpeterian entrepreneurship? We compile four hand-collected measures of high-impact Schumpeterian entrepreneurship (VC-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 much 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.

Magnus Henrekson

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Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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