Foundations and Trends® in Entrepreneurship > Vol 4 > Issue 1

Defining and Measuring Entrepreneurship

By Jens Iversen, Centre for Economic and Business Research (CEBR) and University of Aarhus, Denmark, | Rasmus Jørgensen, Centre for Economic and Business Research (CEBR) and University of Copenhagen, Denmark | Nikolaj Malchow-Møller, Centre for Economic and Business Research (CEBR) and University of Southern Denmark, Denmark

Suggested Citation
Jens Iversen, Rasmus Jørgensen and Nikolaj Malchow-Møller (2007), "Defining and Measuring Entrepreneurship", Foundations and Trends® in Entrepreneurship: Vol. 4: No. 1, pp 1-63.

Publication Date: 27 Sep 2007
© 2008 J. Iversen, R. Jørgensen and N. Malchow-Møller
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In this article:
1 Introduction 
2 Defining Entrepreneurship 
3 Measuring Entrepreneurship 
4 Comparison and Discussion 
5 Conclusion 


Although entrepreneurship has become a buzzword in the public debate, a coherent definition of entrepreneurship has not yet emerged. In this paper, we review and compare the most common theoretical definitions of entrepreneurship in economics and discuss their connection to the various empirical measures in use. We argue that entrepreneurship is best considered a multifaceted concept, and that the different empirical measures reflect different aspects of entrepreneurship. The relevance of this exercise is illustrated by the fact that in a cross-country comparison of entrepreneurship, we find that the relative ranking of countries depends crucially on the indicator used.

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Table of contents:
Defining Entrepreneurship
Measuring Entrepreneurship
Comparisons and Discussion

Defining and Measuring Entrepreneurship

Defining and Measuring Entrepreneurship reviews the most common concepts of entrepreneurship from the theoretical economics literature, identifying common elements and pointing to important differences. The purpose is to compare these theoretical ideas of entrepreneurship with the measures used in empirical country-level studies. Since a coherent or unifying definition of entrepreneurship has not emerged, the authors explain that it is important to be precise about the relationship between the different theoretical aspects of entrepreneurship and the empirical measures. This is revealed by comparing entrepreneurial activity across OECD countries using measures that reflect different theoretical aspects. Based on various data sources, the relative ranking of countries is very sensitive to the empirical measure used.