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New Firm Growth: Exploring Processes and Paths

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Author Info

  • Elizabeth Garnsey
  • Erik Stam
  • Paul Heffernan

Abstract

This paper provides an approach to new firm growth that views this as an unfolding developmental process. This approach is based on a Penrosean (1995) model of the firm. We find that new firm growth is non-linear and prone to interruptions and setbacks to an extent overlooked in the literature. From the model of development used, five propositions are drawn concerning measurable features of new firms' growth paths; these relate to patterns of survival, continuousness of growth, turning points, reversals and cumulative growth. These propositions are examined in the light of data on the growth paths of new firms in three countries, with aggregate comparisons of firms' growth paths effected by graphical representations and sequence analysis.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Industry and Innovation.

Volume (Year): 13 (2006)
Issue (Month): 1 ()
Pages: 1-20

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Handle: RePEc:taf:indinn:v:13:y:2006:i:1:p:1-20

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Related research

Keywords: Firm growth; growth paths; new firms; longitudinal research methods; Penrose;

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References

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  1. Scott Shane & Toby Stuart, 2002. "Organizational Endowments and the Performance of University Start-ups," Management Science, INFORMS, vol. 48(1), pages 154-170, January.
  2. Robert K. Kazanjian & Robert Drazin, 1989. "An Empirical Test of a Stage of Growth Progression Model," Management Science, INFORMS, vol. 35(12), pages 1489-1503, December.
  3. Almus, Matthias & Nerlinger, Eric A, 1999. " Growth of New Technology-Based Firms: Which Factors Matter?," Small Business Economics, Springer, vol. 13(2), pages 141-54, September.
  4. Best, Michael, 2001. "The New Competitive Advantage: The Renewal of American Industry," OUP Catalogue, Oxford University Press, number 9780198297451.
  5. Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
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Citations

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Cited by:
  1. Werner Hölzl, 2012. "Mobility Barriers and the Speed of Market Selection," WIFO Working Papers 437, WIFO.
  2. Alex Coad & Agustí Segarra & Mercedes Teruel, 2010. "Like milk or wine: Does firm performance improve with age?," Papers on Economics and Evolution 2010-06, Max Planck Institute of Economics, Evolutionary Economics Group.
  3. Antje Schimke, 2011. "Factors Affecting the Growth of Manufacturing Firms – Analysis of Growth Stages: A Case of German Firms," ERSA conference papers ersa10p1386, European Regional Science Association.
  4. Alex Coad & Julian Frankish & Richard G. Roberts & David J. Storey, 2011. "Growth Paths and Survival Chances," SPRU Working Paper Series 195, SPRU - Science and Technology Policy Research, University of Sussex.
  5. Teruel Carrizosa, Mercedes & De Wit, Gerrit, 2011. "Determinants of high-growth firms:why do some countries have more high-growth firms than others?," Working Papers 2072/179670, Universitat Rovira i Virgili, Department of Economics.
  6. Schimke, Antje & Teichert, Nina & Ott, Ingrid, 2012. "Impact of local knowledge endowment on employment growth in nanotechnology," Working Paper Series in Economics 38, Karlsruhe Institute of Technology (KIT), Department of Economics and Business Engineering.
  7. Coad, Alex & Frankish, Julian & Roberts, Richard G. & Storey, David J., 2013. "Growth paths and survival chances: An application of Gambler's Ruin theory," Journal of Business Venturing, Elsevier, vol. 28(5), pages 615-632.
  8. Daunfeldt, Sven-Olov & Halvarsson, Daniel, 2012. "Are high-growth firms one-hit wonders? Evidence from Sweden," HUI Working Papers 73, HUI Research.
  9. Erik Stam, 2005. "Why Butterflies Don’t Leave - Spatial development of new firms," ERSA conference papers ersa05p449, European Regional Science Association.
  10. A. Arrighetti & S. Curatolo & A. Lasagni, 2008. "Determinanti della domanda di laureati nell'industria manifatturiera italiana," Economics Department Working Papers 2008-EP02, Department of Economics, Parma University (Italy).
  11. Erik Stam & Elizabeth Garnsey, 2005. "New Firms Evolving in the Knowledge Economy; problems and solutions around turning points," Papers on Economics and Evolution 2005-05, Max Planck Institute of Economics, Evolutionary Economics Group.
  12. Segarra Blasco, Agustí & Teruel Carrizosa, Mercedes, 2011. "High Growth Firms and Innovation: an empirical analysis for Spanish firms," Working Papers 2072/179669, Universitat Rovira i Virgili, Department of Economics.

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