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The culture of entrepreneurship

Author

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  • Chakraborty, Shankha
  • Thompson, Jon C.
  • Yehoue, Etienne B.

Abstract

We study the cultural process through which a society inculcates an entrepreneurial spirit. People work for a guaranteed wage or operate a firm whose risky return depends on business expertise. The latter is culturally acquired, within the family or outside, and people may choose an occupation different from the one they were socialized into. A cultural bias towards safer occupations from colonial and post-colonial policies leads to stagnation where entrepreneurs do not upgrade technology because of their proficiency with existing methods. An aggregate productivity shock can tip this economy towards growth led by established businesses. A human capital shock where existing business expertise is less useful is more disruptive; growth occurs through the emergence of a new class of entrepreneurs. We conclude that culture is not destiny: it adapts even when some cultural traits do not.

Suggested Citation

  • Chakraborty, Shankha & Thompson, Jon C. & Yehoue, Etienne B., 2016. "The culture of entrepreneurship," Journal of Economic Theory, Elsevier, vol. 163(C), pages 288-317.
    • Handle: RePEc:eee:jetheo:v:163:y:2016:i:c:p:288-317
    DOI: 10.1016/j.jet.2015.12.007
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    More about this item

    Keywords

    Entrepreneurship; Culture; Human capital; Colonization; Growth;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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