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 InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 757.
Length: 60 pages
Date of creation: 24 Jun 2008
Date of revision:
Publication status: Published as Henrekson, Magnus and Dan Johansson, 'Competencies and Institutions Fostering High-Growth Firms' in Foundations and Trends in Entrepreneurship, 2009, pages 1-80.
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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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More information through EDIRC
Competence Bloc; Dynamic Capitalism; Entrepreneurship; Flyers; Gazelles; High-growth Firms; Industrial Policy; Innovation; Institutions; Labor Security; Product Market Regulations; Property Rights; Sclerotic Capitalism; Self-employment; Tax Policy;
Other versions of this item:
- Henrekson, Magnus & Johansson, Dan, 2008. "Competencies and Institutions Fostering High-growth Firms," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 5(1), pages 1-80, November.
- Henrekson, Magnus & Johansson, Dan, 2008. "Competencies and Institutions Fostering High-growth Firms," Ratio Working Papers 123, The Ratio Institute.
- H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-07-05 (All new papers)
- NEP-CSE-2008-07-05 (Economics of Strategic Management)
- NEP-ENT-2008-07-05 (Entrepreneurship)
- NEP-INO-2008-07-05 (Innovation)
- NEP-IPR-2008-07-05 (Intellectual Property Rights)
- NEP-KNM-2008-07-05 (Knowledge Management & Knowledge Economy)
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