ENTREPRENEURSHIP, SOCIAL ENVIRONMENT AND ENDOGENOUS GROWTH

Abstract

This paper develops a model highlighting the effect of entrepreneurship on economic growth through social environment (forced mutual help and mimetic dynamics) compatible to an African context. The mimetic dynamics arise when the presence of foreign entrepreneurship inspires local entrepreneurship to develop endogenously through a cumulative process. By using an endogenous growth model (AK model), we show that economic growth is related to usual variables (entrepreneurial rate, productivity of capital, fraction of the economic surplus, rate of depreciation of the capital, fraction of the variation of the investment coming from the economic surplus). Importantly, economic growth is positively related to entrepreneurship through mimetic dynamics depending on some values of an indicator of forced mutual help. For some of these values, the ones compatible with too much community-based transfers, reducing those transfers induce a reinforcement of the impact of mimetic dynamics in entrepreneurship on economic growth. So that, in the context of an economy where the investible surplus is strongly dissolved into the universe of social obligations, governmental policies can reinforce the positive impact of entrepreneurship on economic growth by reducing those community-based transfers.