Firm Growth from a Knowledge Structure Perspective
AbstractAlthough there are several theories of growth of the firm, the literature is limited in two interrelated respects. First, empirical evidence does not match well theoretical predictions. Second, the firm growth literature does not address the structure of knowledge both in firms and sectors as well as knowledge flows between them. Based on existing theoretical and empirical literature, the paper outlines an ‘appreciative’ theory of firm growth and presents new testable hypotheses to inform present and future empirical research. The paper seeks to address this gap by analysing not only levels of human capital, but also its composition both on a firm and sector level. A key departure from earlier approaches is the inclusion of the role of ‘knowledge structures’ played in the growth of the firm. In this context make a distinction between (a) levels of human capital available to firms, (b) the composition of various kinds of human capital (‘firm- specific’, ‘industry-specific’, and ‘general knowledge’) contained, and (c) the diversity of knowledge domains represented to characterise the knowledge structure of firms. In addition, we present our first empirical results, using the knowledge structure approach. In the first part of our empirical analysis we find – while controlling for intial size and industry affiliation – that the availability of a high fraction of employees with higher education within each establishment (an aspect of ‘general kowledge’), is in general conducive to establishment growth. In the second part of the empirical analysis, we find important sectoral differences with respect to the ability of the level of formal education to explain firms growth.
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Bibliographic InfoPaper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 99-11.
Date of creation: 1999
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Web page: http://www.druid.dk/
firm growth; human capital; knowledge structure;
Find related papers by JEL classification:
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-07-11 (All new papers)
- NEP-IND-2000-07-11 (Industrial Organization)
- NEP-INO-2000-07-11 (Innovation)
- NEP-TID-2000-07-11 (Technology & Industrial Dynamics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Peter Maskell, 1996. "Localised Low-tech Learning in the Furniture Industry," DRUID Working Papers 96-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
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- Lee, Keun & Kim, Byung-Yeon, 2009. "Both Institutions and Policies Matter but Differently for Different Income Groups of Countries: Determinants of Long-Run Economic Growth Revisited," World Development, Elsevier, vol. 37(3), pages 533-549, March.
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