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Cultural transmission and persistence of entrepreneurship

Artikel i vetenskaplig tidskrift
Författare G. Olcina
Elena Mas Tur
L. Escriche
Publicerad i Small Business Economics
Volym 54
Nummer/häfte 1
Sidor 155-172
ISSN 0921-898X
Publiceringsår 2020
Publicerad vid Institutionen för ekonomi och samhälle, Innovation and Entrepreneurship (IIE)
Sidor 155-172
Språk en
Länkar dx.doi.org/10.1007/s11187-018-0089-...
Ämnesord Entrepreneurship, Cultural transmission, Entrepreneurial preferences, Tax policy, Public administration efficiency, intergenerational transmission, regional-development, firm formation, investment, incentives, dynamics, taxes, risk, Business & Economics
Ämneskategorier Ekonomi och näringsliv

Sammanfattning

This paper contributes to explain the persistence of differences in levels of entrepreneurship within and across countries. We provide an explanation based on the dynamic interplay between purposeful intergenerational transmission of preferences for entrepreneurship and public administration efficiency. Individuals vote on taxes, and the collected taxes fund the civil servants' wages. The performance of the administration generating an efficient normative and regulatory environment, affects the success of entrepreneurship. We show that an economy can reach two different long-run equilibria: a traditional equilibrium, with a low proportion of entrepreneurs, high taxes and an inefficient administration and, an entrepreneurial equilibrium with a high proportion of entrepreneurs and, lower taxes but enough to implement an efficient administration. The equilibrium achieved depends on the tax policy followed by the different generations. If decisions are made by majority voting in a myopic way, then the initial conditions of the society become crucial. This result explains persistence: an economy evolves around similar levels of entrepreneurship unless some reforms are implemented.

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