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Employment Growth of New Firms

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  • Elisabeth Garnsey
  • Petra Gibcus
  • F. Stam
  • Jennifer Telussa

Abstract

This paper provides an overview of empirical studies on employment growth in new firms and offers a systematic analysis of new empirical data to address the methodological issues identified. Using a longitudinal database of 354 firms over their first ten years, we examine factors associated with new firm growth in terms of R&D, inter-firm alliancing, new product development, and exporting; these are activities that have been identified as denoting dynamic capabilities. The empirical evidence gives some evidence for the positive association between dynamic capabilities and new firm growth. Inter-firm alliancing is the only indicator of dynamic capabilities that has a positive effect on new firm growth. No moderating effect on dynamic capabilities and growth could be seen to be exerted by the level of human capital and/or firm resources. Environmental dynamism – assumed to be highly relevant in the dynamic capability approach – is not revealed to be a moderating factor affecting the relationship between dynamic capabilities and new firm growth.

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Bibliographic Info

Paper provided by EIM Business and Policy Research in its series Scales Research Reports with number H200716.

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Length: 24 pages
Date of creation: 20 Dec 2007
Date of revision:
Handle: RePEc:eim:papers:h200716

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Cited by:
  1. E. Stam & R. Martin, 2012. "When High Tech ceases to be High Growth: The Loss of Dynamism of the Cambridgeshire Regio," Working Papers 12-10, Utrecht School of Economics.

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