Competencies and Institutions Fostering High-growth Firms
AbstractHigh-growth firms (HGFs) are critical for net job creation and economic growth. We analyze HGFs using the theory of competence blocs, linking firm growth to property rights and the interaction of complementary expertise. Specifically, we discuss how the institutional framework affects the prevalence and performance of HGFs. Firm growth is viewed as resulting from the perpetual discovery and use of productive knowledge. A key element in this process is the competence bloc, a nexus of economic actors with complementary competencies that are vital in order to generate and commercialize novel ideas. The institutional framework determines the incentives for these individuals to acquire and utilize knowledge. We identify a number of institutions that foster the emergence of competence blocs and the creation of HGFs. In particular, our analysis points to the pivotal roles played by tax structures, labor market regulation, and the contestability of currently closed service markets. Finally, we characterize institutions beneficial for sclerotic or dynamic capitalism, respectively, depending on whether they provide a favorable environment for the emergence of competence blocs and the creation of HGFs.
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Bibliographic InfoArticle provided by now publishers in its journal Foundations and Trends(R) in Entrepreneurship.
Volume (Year): 5 (2008)
Issue (Month): 1 (November)
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Web page: http://www.nowpublishers.com/
Other versions of this item:
- Henrekson, Magnus & Johansson, Dan, 2008. "Competencies and Institutions Fostering High-growth Firms," Ratio Working Papers 123, The Ratio Institute.
- Henrekson, Magnus & Johansson, Dan, 2008. "Competencies and Institutions Fostering High-growth Firms," Working Paper Series 757, Research Institute of Industrial Economics.
- H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- P14 - Economic Systems - - Capitalist Systems - - - Property Rights
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