Peter G Klein

Peter G Klein
Baylor University | BU · Department of Entrepreneurship

PhD, Economics, University of California, Berkeley

About

163
Publications
176,766
Reads
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7,931
Citations
Citations since 2016
45 Research Items
4513 Citations
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Introduction
My research focuses on the links between entrepreneurship, strategy, and organization, with application to innovation, diversification, vertical coordination, health care, and public policy.
Additional affiliations
September 2015 - present
Baylor University, Hankamer School of Business
Position
  • Professor
Description
  • Professor, Department of Entrepreneurship, and Senior Research Fellow, Baugh Center for Entrepreneurship & Free Enterprise
June 2013 - present
Mises Institute
Position
  • Carl Menger Research Fellow
January 2008 - present
Norwegian School of Economics
Position
  • Professor (Associate)

Publications

Publications (163)
Article
Policymakers, commentators, and academics have called for a Great Reset, a deepseated overhaul of the organization of the global economy. Some suggest that management theory needs a reset of its own. We argue that Great Reset proponents fail to appreciate the power of markets to bring about desirable social outcomes and are overly sanguine about wh...
Chapter
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Academics, pundits, and policymakers have recently called for a stronger governmental role in the economy to tackle social issues such as inequality and grand challenges like global warming. Despite a general recognition among economists and management scholars that government efforts to guide and control innovation or subsidize private entrepreneu...
Article
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What is now called the judgment-based approach to entrepreneurship (JBA) has a rich pedigree in Austrian economics and continues to grow rapidly in that tradition as well as in various research fields in business and management. The JBA has also attracted some criticisms. Frédéric Sautet’s recent review essay is an example. Sautet’s main concern is...
Article
As design science advances into the foreground of entrepreneurship theory, we see a meta-theoretical tension between Simon's classic exposition of design and entrepreneurship theory's foundations within the Austrian school of economics. To resolve this tension, we argue that design science is mispositioned atop the conventional positivism that Simo...
Article
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Research summary Innovative entrepreneurship, defined as the creation of new products, services, production methods, or business models, is critical for firm, industry, and economic growth and a key determinant of societal well‐being. This special issue explores the roles of institutions and government policies in promoting or impeding innovative e...
Article
Digital transformation is fundamentally changing the business landscape. It is also affecting the roles of top managers within firms. Our survey of more than 160 senior managers in Europe suggests that digitalization, rather than encouraging more decentralized forms of management, will lead to an expanded role for headquarters and further empowerme...
Article
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The impacts of COVID-19 on workers and workplaces across the globe have been dramatic. This broad review of prior research rooted in work and organizational psychology, and related fields, is intended to make sense of the implications for employees, teams, and work organizations. This review and preview of relevant literatures focuses on (a) emerge...
Article
Research summary Research has examined how “economizing” and “strategizing” mechanisms interact in driving competitive outcomes, but the role of coalitions in this process has received little attention. Coalitions are formed to create more value (i.e., economizing) and to strengthen competitive positions (i.e., strategizing). Based on a formal coal...
Article
Research summary Ownership is fundamental to firm strategy, organization, and governance. Standard ownership concepts—mainly derived from agency and incomplete contracting theories—focus on its incentive effects. However, these concepts and theories neglect ownership's role as an instrument to match judgment about resource use and governance with t...
Preprint
Full-text available
COVID-19’s impacts on workers and workplaces across the globe have been dramatic. We present a broad review of prior research rooted in work and organizational psychology, and related fields, for making sense of the implications for employees, teams, and work organizations. Our review and preview of relevant literatures focuses on: (i) emerging cha...
Article
Full-text available
Purpose As the prioritization of family goals depends on the resolution of family conflict, this study's purpose is to explain how a dominant coalition (DC) of parental family members prioritizes their family economic and non-economic goals when faced with different types of family conflict. Design/methodology/approach A conceptual framework is de...
Article
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Elert and Henrekson (2019) draw important connections between Austrian economics and the Schumpeterian literatures on “development blocs” and “the experimentally organized economy.” We appreciate their emphasis on experimentation and think that Austrian ideas on the time structure of production and the multiple specificities of capital offer comple...
Book
The 'Austrian' tradition is well-known for its definitive contributions to economics in the twentieth century. However, Austrian economics also offers an exciting research agenda outside the traditional boundaries of economics, especially in the management disciplines. This Element examines how Austrian ideas play a key role in expanding the unders...
Article
We study knowledge flows between organizations through secondments, short-term employee assignments at an organization different from the home institution. Secondments allow the sending organization to capture knowledge and network resources from the receiving organization without an organization-level contract, alliance, or colocation, a process w...
Article
The economics and management literatures pay increasing attention to the technological, competitive, and institutional environment for entrepreneurship. However, less is known about how context influences the judgment of entrepreneurs. Focusing on the emerging judgment‐based approach to entrepreneurship, we argue that economics can say much about h...
Chapter
We argue that the stakeholder and CSR literature can benefit from more systematic thinking about ownership. We discuss general notions of ownership in the economics and legal literature and the entrepreneurial notion of ownership we have developed in prior work. On this basis, we argue that stakeholder theory needs to deal more systematically with...
Article
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We examine how country-level institutional context moderates the relationship between three socio-cognitive traits-entrepreneurial self-efficacy, alertness to perceived business opportunities, and fear of failure-and entrepreneurial action. To do this, we blend social cognitive theory (SCT) with institutional theory to develop a multi-level model o...
Article
A central construct in competitive strategy research is market power, the ability to raise price above marginal cost. Positioning research focuses on attempts to build, protect, and exercise market power. However, this approach contains hidden assumptions about transaction costs. Parties made worse off by the exercise of market power can negotiate,...
Article
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Governance gives life to an organization by establishing the rules that shape organizational action. Structures of governance rest on stakeholder engagement, particularly on how stakeholders assess the prospects for earning a return by committing their specialized resources to the organization. Once formalized, governance structures and processes c...
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While judgment has hitherto typically been viewed as a discrete decision process, we propose that it be conceptualized instead as a continuous and dynamic process of reassessment and revision. Adopting this approach, we revisit the nature of entrepreneurial decision-making under uncertainty. We begin with a novel typology of uncertainty that define...
Article
We briefly summarize the contributions of Oliver Hart and Bengt Holmstrom, two key founders of modern contract theory, and describe their significance for the analysis of organizations and institutions. We then discuss the foundations of modern contract theory and review some criticisms related to modeling strategy, assumptions about knowledge and...
Article
In this paper we analyze the impact of academic incubators on the quality of innovations produced by US research-intensive academic institutions. We show that establishing a university-affiliated incubator is followed by a reduction in the quality of university innovations. The conclusion holds when we control for the endogeneity of the decision to...
Article
Entrepreneurship is regarded as key to economic growth, job creation, and greater prosperity. Indeed, entrepreneurship drives net job growth in the United States, the European Union, and some Asian countries. Yet the United States has experienced a decline in entrepreneurial dynamism since the 1970s, and some European countries continue to struggle...
Article
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Firms are established by entrepreneurs, and entrepreneurship is typically embodied within a firm. And yet, the research literatures on entrepreneurship and the theory of the firm developed mostly independently. I suggest some reasons why these literatures have struggled to connect, and offer a potential path forward, one that describes the entrepre...
Chapter
Innovation is critical for firm and national competitiveness. However, financing innovation is increasingly difficult for early-stage, high-risk projects, as banks and venture capital firms are focusing on later-stage, less risky projects. To fill this gap, US and European entrepreneurs are turning for seed funding to Business Angels (BAs) and Busi...
Article
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How do individual characteristics and the business environment affect the ethical judgment of entrepreneurs? We build on literatures in stakeholder and cognitive theory to examine the effects of situational complexity and novelty on an entrepreneur’s ethical judgment. Our conceptual framework shows how confirmation biases and inward biases affect t...
Chapter
The entry discusses the strategy of designing and implementing public policies intended to promote public interests. It begins by recognizing that public interests are complex, multifaceted, ambiguous and implemented in weak selection environments. However, theories from strategic management, originally formulated to deal with private-sector issues...
Chapter
This entry reviews contractual incompleteness and its implications for firm strategy and organization. An incomplete contract is an agreement that does not specify actions and payments for all possible contingencies. All but the simplest contracts are incomplete, containing ‘gaps’ that must be filled by negotiation, convention, or formal dispute re...
Article
Ronald H. Coase was one of the most innovative and provocative economists of the twentieth century. Besides his best known papers on ‘The Nature of the Firm’ and ‘The Problem of Social Cost’, he had a major role in the development of the field of law and economics, and made numerous influential contributions to topics including public utilities, re...
Article
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Over the last three decades entrepreneurship has become a hot topic in economics and management. Much of the entrepreneurship research literature has built upon insights of economists such as Schumpeter, Knight, and Kirzner, each of whom has inspired a distinct strand of entrepreneurship theory and application. Schumpeterian innovation and Kirzneri...
Article
A milk scandal erupted in China in 2008 when the industrial chemical melamine was found in dairy products nationwide. While many Chinese dairy companies faced huge losses or bankruptcy as a result, one small firm, Dairy United, accelerated its development. Dairy United is one of the fastest-growing and most innovative Chinese dairy producers, one t...
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The field of application of Corporate Social Responsibility (CSR) is limited to the corporations as the very acronym CSR indicates (i.e.: corporate). This symposium discusses the systemic need and the timely opportunity to extend CSR to public administration (that is, to include all non-profit governmental organizations) as CSR is about responsible...
Article
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An increasing number of scholars have called for a more robust view of the micro-foundations for strategy and entrepreneurship, typically understood as foundations that are rooted in individual cognition, behavior, and action. We offer a rich theoretical model of judgmental decision-making that treats judgmental decision making as an ongoing proces...
Article
Research has increasingly demonstrated the significant role of uncertainty in determining business and entrepreneurial success. Our understanding of uncertainty, however, is quite sparse and often conflated with various notions of unpredictability. This is not surprising, in part, due to the nature of uncertainty in that it is difficult to understa...
Article
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The Industrial Revolution brought the decline of small-scale, cottage production and the rise of large, integrated businesses; Adam Smith's invisible hand was replaced with what business historian Alfred D. Chandler Jr., called the "visible hand" of management. But now that pendulum appears to be swinging the other way - to a system of loose networ...
Chapter
Monetary theory and policy are fundamental issues in economics and there are huge literatures on the theory and practice of central banking. While sometimes criticizing particular Fed policies or Fed behavior during certain episodes, the academic literature is generally laudatory (Friedman and Schwartz 1963; Blinder 1998, 2013; Meltzer 2003, 2010),...
Article
There is great interest in evaluating the impact of private equity investments on innovation and economic growth. However, there is no direct empirical evidence on the effects of such transactions on the innovation strategies of entrepreneurial firms. We fill this gap by examining a rich project-level data set consisting of entrepreneurial firms re...
Article
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We review the place of Austrian economics in contemporary entrepreneurship and management research, focusing on the contributions of Israel Kirzner. We show that Kirzner’s central concept of entrepreneurial discovery has been vastly influential in theoretical and applied work on entrepreneurship, even though Kirzner’s larger research program has no...
Article
Unlike most other mature industries; the agricultural production sector is dominated by family firms, partnerships, and cooperatives; with few corporations and limited access to capital derived from a source other than retained earnings and existing owners. However, use of external equity capital in agriculture has increased dramatically since 1990...
Article
Full-text available
Unlike most other mature industries, family firms, partnerships, and cooperatives dominate the agricultural production sector, with few corporations and limited access to capital derived from a source other than retained earnings and existing owners. However, the use of external equity capital in agriculture has increased dramatically since 1990. T...
Article
Austrian economics focuses on markets, but has much to say about organizations. In particular, Austrian insights on the structure of production, the heterogeneity and subjectivity of resources, the nature of uncertainty, the role of monetary calculation, and the function of the entrepreneur provide solid foundations for a distinctly Austrian theory...
Article
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Public organizations are relatively understudied in the strategic entrepreneurship literature. In this article, we submit that public organizations are usefully analyzed as entities that create and capture value in both the private and public sectors and that a capabilities lens sheds important new insights on their behavior. As they try to create...
Article
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We review and critique Israel Kirzner's concept of the entrepreneur, offering three challenges to his basic analytical framework. First, we characterize Kirzner's empha-sis on equilibration as a departure from the causal-realist price theory of Menger and his nineteenth-and twentieth-century followers. Second, we contrast Kirzner's idea of entre-pr...
Article
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We briefly survey Hayek’s work and argue for its increasing relevance for organizational scholars. Hayek’s work inspired aspects of the transaction cost approach to the firm as well as knowledge management and knowledge-based view of the firm. But Hayek is usually seen within organizational scholarship as a narrow, technical economist. We hope to c...
Article
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Private equity is best understood not as a financing method but as a governance structure, one that emphasizes strong performance incentives, rules over discretion, and a strong alignment between ownership and management. Briefly, private equity governance makes owners into active managers and makes managers behave like owners. As such, private equ...
Article
Strategic entrepreneurship is a newly recognized field that draws, not surprisingly, from the fields of strategic management and entrepreneurship. The field emerged officially with the 2001 special issue of the Strategic Management Journal on “strategic entrepreneurship”; the first dedicated periodical, the Strategic Entrepreneurship Journal, appea...
Article
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Debates on "shareholder" and "stakeholder" approaches to corporate governance often get bogged down in competing normative claims about economic rent streams, entitlements of different group members, fairness, and similar distributional issues. These concerns are important, but core economic issues in shareholder-stakeholder debates revolve around...
Article
Entrepreneurship, long neglected by economists and management scholars, has made a dramatic comeback in the last two decades, not only among academic economists and management scholars, but also among policymakers, educators and practitioners. Likewise, the economic theory of the firm, building on Ronald Coase's (1937) seminal analysis, has become...
Article
Policymakers talk about entrepreneurship as a way of improving economic conditions in developing countries the way they used to talk about roads, dams, bridges, and other infrastructure projects. But what exactly is entrepreneurship? Is it simply self-employment or new-venture formation — a set of outcomes that can be measured, analyzed, and perhap...
Article
The adoption and diffusion of contract farming and vertical integration in modern agriculture has varied widely across regions, commodities, or farm types. This paper lays out a framework for understanding the evolution of organizational practices in U.S. agriculture by drawing on theories of the diffusion of technology and organizational complemen...
Article
The production of biofuels in many countries is largely driven by the government strategy and incentives that are in place. In South Africa the first round of the development of such a draft strategy took place in 2005 while the official stance on biofuels was finalized in December of 2007. During the policy development process various governmental...
Article
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The study of entrepreneurship and the study of economic organizing lack contact. In fact, the modern theory of the firm virtually ignores entrepreneurship, while the literature on entrepreneurship often sees little value in the economic theory of the firm. In contrast, we argue in this chapter that entrepreneurship theory and the theory of the firm...
Article
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Com a redução da oferta do crédito subsidiado no financiamento da agricultura brasileira, os agentes econômicos ao longo dos sistemas agroindustriais organizam-se para associar crédito a suas transações de compra e venda com agricultores. Diferentes arranjos contratuais caracterizam-se por distintas estruturas de financiamento. No presente estudo,...
Article
The survivor principle holds that the competitive process weeds out inefficient firms, so that hypotheses about efficient behavior can be tested by observing how firms actually behave. This principle underlies a large body of empirical work in strategy, economics, and management. But do competitive markets actually display what is efficient? Is the...
Article
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This paper discusses the theoretical and empirical body of research on entrepreneurship, and uses the long-lasting television series The Simpsons to illustrate the main points, approaches, and problems in the literature.
Article
This paper offers a critical perspective on Israel Kirzner’s basic analytical framework. Specifically, we characterize Kirzner’s emphasis on processes of equilibration as a departure from the causal-realist price theory developed by Menger and his nineteenth- and twentieth-century followers. In this context, we contrast Kirzner’s interpretation of...
Article
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This paper explores innovation, experimentation, and creativity in the public domain and in the public interest. Researchers in various disciplines have studied public entrepreneur-ship, but there is little work in management and economics on the nature, incentives, constraints, and boundaries of entrepreneurship directed to public ends. We identif...
Article
We provide evidence on organizational structure and performance at bank holding companies (BHC's). First, we show that a BHC's member banks benefit from access to internal capital markets. Second, we ask if these benefits are best realized within loosely structured, decentralized organizations or more consolidated, centralized firms. We find that B...
Article
How do diversifying firms chose their target industries? We use two population-level samples and new measures of relatedness to decompose the determinants of diversifying entry into internal factors (firm-specific resources and capabilities) and external factors (industry attractiveness). Our approach captures a variety of sources and types of rela...
Article
States, state agencies, multilateral agencies, and other non-market actors are relatively under-studied in strategic management and organization science. While important contributions to the study of public actors have been made within the agency-theoretic and transaction-cost traditions, there is little research in political economy that builds on...
Article
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We explore the regional determinants of entrepreneurial activity with a latent-variables framework in which entrepreneurship is not observed directly, but manifested in activities such as producing patentable innovations, receiving venture funding, and establishing new enterprises. We find that R&D expenditures, the presence of anchor firms, good (...
Article
This paper investigates the use of procurement methods and contracting terms in markets for organic products, where contracting is more prevalent than in the conventional commodity sector. Findings largely support transaction cost arguments for chosen procurement methods and contracting terms. Further, contracting is decreasing in general, while th...
Book
'Not too long ago it was possible to be familiar with all of the important works and latest developments in transaction cost economics. That that is no longer the case is a testament to the intellectual appeal and empirical success of the transaction cost approach. For newcomers, the entries in this volume, by some of TCE's most knowledgeable and e...
Article
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AS THE TRANSACTION COST THEORY OF THE FIRM was taking shape in the 1970s, another important movement in economics was emerging: a revival of the "Austrian" tradition in economic theory associated with such economists as Ludwig von Mises and F. A. Hayek (1973; Dolan, 1976; Spadaro, 1978). As Oliver Williamson has pointed out, Austrian economics is a...
Article
Full-text available
The conventional approach to measuring interindustry relatedness uses the Standard Industrial Classification (SIC) system to capture the “distance” between industries. Although relatedness measures based on SIC codes (or equivalent classifications) are readily available and easy to compute, they do not screen effectively for the conditions under wh...
Article
Macroeconomic theory assumes that factors of production in the economy are homogeneous and fungible. As a result, it is poorly suited for analyzing and developing policy responses to the recent financial crisis. Theories of strategic management and organization, with their emphasis on heterogeneous resources and capabilities, are better positioned....
Article
Full-text available
Because of a reduction in the supply of subsidized agricultural credit in Brazil, the economic agents in the agro-industrial systems organized themselves to tie in credit and their buying and selling transactions with farmers. Different types of agreements appeared, characterized by different finance structures. In this study, the authors aimed at...
Conference Paper
Full-text available
This paper explores how management theories can be extended and applied to innovation, experimentation, and creativity in the public domain. Researchers in various disciplines have studied public entrepreneurship, but there is little research specifically on the management of organizations to innovate in the public interest. We begin by extending c...
Article
We review theory and evidence on corporate diversification, industry structure, and firm strategy from an organizational economics perspective. First, we examine the implications of transaction cost economics (TCE) for diversification decisions. TCE is essentially a theory about the costs of contracting, and TCE sheds light on the firm’s choice to...
Article
IntroductionBackground, Context, and Prior LiteratureRegression ResultsConclusion Appendix 11.A: Summary of PE FirmsNotesAbout the AuthorsAcknowledgments
Article
Full-text available
Israel Kirzner's concept of entrepreneurship as alertness to profit opportunities is one of the most influential modern interpretations of the entrepreneurial function. Shane and Venkataraman's (2000: 218) influential assessment defines entrepreneurship research as "the scholarly examination of how, by whom, and with what effects opportunities to c...
Article
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The Austrian School of economics—the causal-realist, marginalist, subjectivist tradition established by Carl Menger in 1871—has experienced a remarkable renaissance over the last five decades. It is not always clear, however, exactly what distinguishes the Austrian School from other traditions, schools of thought, approaches, or movements within ec...
Chapter
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Introduction: The food and agriculture sector offers many opportunities to apply concepts from the new institutional economics (NIE). Indeed, some of the earliest modern studies on economic organization focussed on agricultural contracting such as cropsharing (Stiglitz 1974), land tenancy arrangements (Roumasset and Uy 1980; Alston and Higgs 1982;...
Chapter
Institutions frame behaviors and exchanges in markets, business networks, communities, and organizations throughout the world. Thanks to the pioneering work of Ronald Coase, Douglas North and Olivier Williamson, institutions are now recognized as being a key factor in explaining differences in performance between industries, nations, and regions. T...
Article
This article reviews and critiques the opportunity discovery approach to entrepreneurship and argues that entrepreneurship can be more thoroughly grounded, and more closely linked to more general problems of economic organization by adopting the Cantillon-Knight-Mises understanding of entrepreneurship as judgment. The article begins by distinguishi...
Article
The conventional approach to measuring inter-industry relatedness uses the SIC system to capture the "distance" between industries. While relatedness measures based on SIC codes (or equivalent classifications) are readily available and easy to compute, they do not screen effectively for the conditions under which related diversification creates val...
Article
Full-text available
This article maintains that the consistent application of subjectivism helps reconcile contemporary entrepreneurship theory with the strategic management literature, particularly the resource-based view of the fi rm. The article synthesizes theoretical insights from Austrian economics, Penrose's (1959) resources approach, and modern resource-based...

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Project
This special issue aims to deepen our understanding of public policies to promote innovative entre-preneurship. We hope to collect exemplary empirical research and theoretical developments that showcase novel empirical strategies, theoretical concepts, and new data sources. Because entrepre-neurship is a broad and interdisciplinary phenomenon, we are open to perspectives that combine entrepreneurship with views from other fields such as strategy, public economics, business, sociology, etc. Innovative entrepreneurship may be distinguished from other forms of entrepreneurship by an em-phasis on novel products, services, production methods, or business models. Such innovation should increase the likelihood of firm growth, wealth creation, and the addition of value-added jobs which are crucial for economic development (Acs et al., 2016; Audretsch, 2007; Baumol, 2010; Carree & Thurik, 2003; OECD, 2010). Public agencies and institutions seeking to improve econom