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Assessing the role of strategy and socioeconomic heritage for rapidly growing firms: evidence from Germany

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  • Michael Wyrwich

Abstract

The present paper sheds light on how growth of young firms is affected by expansive strategies and the socioeconomic heritage of their main actors. 'Socioeconomic heritage' has to do with socialisation, prior socioeconomic circumstances and regional growth conditions; the term is elaborated upon and further defined in this study. The empirical analysis is carried out both for West Germany – a mature market economy – and for East Germany, which operated under a centrally planned economy until German reunification in 1990. The main finding of the paper is that the involvement of West Germans in East German start-ups has a favourable effect on these firm's chances of growing rapidly. This effect is attributed to the fact that West Germans are more likely to possess person-related and situation-related factors necessary for growing a business in a market economy. The results are more ambiguous as to the influence of expansive strategies on fast growth.

Suggested Citation

  • Michael Wyrwich, 2010. "Assessing the role of strategy and socioeconomic heritage for rapidly growing firms: evidence from Germany," International Journal of Entrepreneurial Venturing, Inderscience Enterprises Ltd, vol. 1(3), pages 245-263.
    • Handle: RePEc:ids:ijeven:v:1:y:2010:i:3:p:245-263
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    Citations

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    Cited by:

    1. Michael Fritsch & Elisabeth Bublitz & Alina Sorgner & Michael Wyrwich, 2014. "How much of a socialist legacy? The re-emergence of entrepreneurship in the East German transformation to a market economy," Small Business Economics, Springer, vol. 43(2), pages 427-446, August.
    2. Patrycja Grinberger & Natalia Nehrebecka, 2015. "Determinants of firm’s growth: empirical study of Polish listed companies," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 43.
    3. Alexander Kupfer & Julia Oberndorfer & Felix Kunz, 2022. "Why do corporate cash holdings differ within reunified Germany?," Journal of Business Economics, Springer, vol. 92(2), pages 197-232, February.

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