The last two decades have witnessed a wealth of studies analyzing the determinants of entrepreneurship and some of these studies are theoretical (Holmes et al, 1990), while others are empirical (Evans et al, 1989). For instance, Acs & Varga studied eleven countries and found that entrepreneurship has a positive significant effect on economic development.
However, entrepreneurship has not found a proper place in mainstream empirical economic research on the sources of economic growth (Wong & Autio, 2005). Although many researches have been conducted theoretically and descriptively on how entrepreneurship affects the economy (Porter, 1990; Lumpkin & Dess, 1996), there is lack of evidence based on empirical data. This is partially due to the difficulty in defining the role of the entrepreneur and formalizing its measurement for empirical modelling. Wennekers & Thurik synthesized these disparate strands of the literature to construct an operational framework linking entrepreneurship and economic growth. They tried to highlight the multiple role of the entrepreneur, beyond that of the innovator, that includes not only something new but also a new entry in the market. Electronic commerce

Similarly, Schmitz & James conceptualised a model motivated by the endogenous growth models as developed by Romer, who concluded that increasing levels of entrepreneurship in an economy generates additional input in the economy. In the same manner, Schumpeter first claimed that entrepreneurship causes economic growth by allowing the means of production in a society to be used in newer and more efficient combinations. A more recent argument for treating entrepreneurship as an independent factor of economic growth can be found in Audretsch & Keilbach, who examined the exact nature of the relationship between knowledge and economic growth. They argue that a distinction should be made between the general body of publicly available knowledge and economic knowledge – a subset of knowledge from the general body which businesses have found a way to use profitably. The authors actually state that general knowledge is converted into economic knowledge by the efforts of entrepreneurs, who essentially sift through the general body of knowledge until they find something they believe they can exploit and then start a business based on that piece of knowledge. Thus, knowledge by itself is not enough to create economic growth, since entrepreneurship is required to turn general knowledge into economic knowledge (Smith, 2010).