2014/01/21 by Magnus Henrekson, Tino Sanandaji · 1 voice · 2 citations
Business, Management and Accounting · Computer Science · #Economic Growth and Development #Entrepreneurship Studies and Influences #Private Equity and Venture Capital
paper · pdf · doi:10.1073/pnas.1307204111
openalex publication_date 2014/01/21 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/15
Entrepreneurship policy mainly aims to promote innovative Schumpeterian entrepreneurship. However, the rate of entrepreneurship is commonly proxied using quantity-based metrics, such as small business activity, the self-employment rate, or the number of startups. We argue that those metrics give rise to misleading inferences regarding high-impact Schumpeterian entrepreneurship. To unambiguously identify high-impact entrepreneurs we focus on self-made billionaires (in US dollars) who appear on Forbes Magazine's list and who became wealthy by founding new firms. We identify 996 such billionaire entrepreneurs in 50 countries in 1996-2010, a systematic cross-country study of billionaire entrepreneurs. The rate of billionaire entrepreneurs correlates negatively with self-employment, small business ownership, and firm startup rates. Countries with higher income, higher trust, lower taxes, more venture capital investment, and lower regulatory burdens have higher billionaire entrepreneurship rates but less self-employment. Despite its limitations, the number of billionaire entrepreneurs appears to be a plausible cross-country measure of Schumpeterian entrepreneurship.