Total factor productivity of twenty OECD countries for a recent period (1971-2002) is explained using six different models based on the established literature. Traditionally, entrepreneurship is not dealt with in these models. In the present paper it is shown that – when this variable is added - in all models there is a significant influence of entrepreneurship while the remaining effects mainly stay the same. Entrepreneurship is measured as the business ownership rate (number of business owners per workforce) corrected for the level of economic development (GDP per capita).

OEC D, TFP, entrepreneurship, research and development, total factor productivity
Consumption, Saving, Production, Employment, and Investment: General (jel E20), Entrepreneurship (jel L26), New Firms; Startups (jel M13), Economic Development: General (jel O10), Technological Change; Research and Development (R&D): General (jel O30), Economic Growth and Aggregate Productivity: General (jel O40), Economywide Country Studies: General (jel O50)
Tinbergen Institute
Tinbergen Institute Discussion Paper Series
Discussion paper / Tinbergen Institute
Tinbergen Institute

Erken, H.P.G, Donselaar, P, & Thurik, A.R. (2009). Total Factor Productivity and the Role of Entrepreneurship (No. TI 09-034/3). Discussion paper / Tinbergen Institute. Tinbergen Institute. Retrieved from