Ying Lowrey

Business Density, Entrepreneurship and Economic Well-Being

This paper attempts to relate the economic well-being to business density, defined as the number of business firms per 1,000 persons. Using 50 United States business/firm data and macroeconomic data, this paper provides literature rationales and statistical testing results that demonstrate the significant linkage between business density and economic well-being at the state level. The paper estimates that increasing 1 percent of business density escalates personal income, household income and tax revenue by more than 1 percent. Especially, the test indicates the impact of women business ownership to be more robust in improving economic well-being. Problems facing economically disadvantaged groups still remain. Tremendous potentials exist in the nation for small business ownership and entrepreneurship, proven to be the most effective vehicles to achieve economic efficiency and equality. Productive government policy can be the key to turn on the effective vehicles and to excavate the potentials for improving the nations economic well-being.

An Examination of the Entrepreneurial Effort

This paper examines the economic effects of entrepreneurial effort. It challenges the neoclassical doctrine of representative agents utility maximization problem and suggests a return to the classical economic theory of the entrepreneur in the tradition of Max Weber and Joseph Schumpeter. From this classical tradition and the data evidence, the entrepreneurial effort is found to be the intrinsic character of the entrepreneur. This paper divides the human effort into subsistence production and entrepreneurial production. When the representative entrepreneur is assumed to take pleasure in making entrepreneurial efforts, the utility maximization requires a higher productivity of subsistence production than that of entrepreneurial production. The paper also develops a two-period and two-goods dynamic model that allows the inclusion of an initial capital to this representative entrepreneurs utility maximization problem. The model predicts that an additional unit of initial capital generates a substitution effect on the first period, but a complementary effect on the second period entrepreneurial effort. Further, the entrepreneurial production positively associates with the initial capital.

Entrepreneurial Activities: A Microeconomic Analysis

People have different preferences for performing entrepreneurial activities. These differences can be influenced by actions of the state. Special attention is paid to examine the individual behavior in choosing employed work or entrepreneurial activities. Individual supply of entrepreneurial work is aggregated. Equilibrium entrepreneurial activity is given by the balance of aggregate supply and aggregate demand. States can promote more aggregate supply of entrepreneurial activity through engaging institutional devices, or they can make institutional changes to increase aggregate demand for entrepreneurial activity through domestic and global markets. The effects of appropriate institutional settings on entrepreneurial activities over time are highlighted.

Growing-by-Unleashing Grassroots Entrepreneurship and Alibaba Innovations

Inspired by Phelps’ book (Mass flourishing: how grassroots innovation created jobs, challenge, and change. Princeton University Press, Princeton, 2013) and drawing upon Alibaba’s experience, this paper discusses a small-business-based and digital-technology-driven new growth model—growing by unleashing grassroots entrepreneurship. Small business is an important expression of individuals’ will, capacity, and aspiration to innovate. In the digital age, technology-driven platform can assist small business to thrive. From Alibaba’s experience, building credibility and trust, providing open, transparent, efficient, and accountable finance services and establishing rules of games are crucial in the digital age for unleashing grassroots entrepreneurship and innovation that can bring sustainable mass flourishing.