Purpose: The main aim of this paper is to analyze the relationship between innovation and economic growth, following the Schumpeter approach, considering the entrepreneurship activity.Design/methodology/approach: Several hypotheses are tested considering three equations, for the case of ten developed countries. To estimate the equations, generalized least square (GLS)‐cross‐section weights and panel least squares methodologies for the period 2001‐2009 have been used.Findings: Innovation plays a central role in the economic growth process and the entrepreneur is the vehicle to introduce the new technologies to improve the firms' activity and to obtain higher profits. It is also necessary to include in this process other variables: social climate and the role of institutions.Practical implications: Some measures can design from these results to improve innovation and entrepreneurship activity, which would have positive effects on economic growth.Originality/value: Schumpeterian approach is developed for this analysis, and empirical estimations are carried out to test hypotheses on economic growth and innovation, considering not only the traditional quantitative variables but also qualitative ones, having a wider view about the process. Drucker statement on innovation effects on entrepreneurship activity is also tested.

In general terms, governance simply means how an organization is governed. It is the science of government performance and behaviour and it refers to several processes that must include historical, cultural, social and political determinants. For this reason, it is possible to establish a relationship between governance and institutions. Communities of persons, firms and institutions are essential ingredients of good governance and its analysis could be developed considering two possibilities. The first is considering the factors, such as entrepreneurship, by which government would more efficiently increase economic growth. Second is taking into account the economic results obtained by government. The primary goal of this paper is to analyze the relationship between governance, entrepreneurship and economic growth, developing an empirical analysis for the case of 11 developed countries.