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Socioeconomic heritage and rapid firm growth

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  • Michael Wyrwich

    ()
    (Friedrich Schiller University Jena, Department of Economics)

Abstract

The present paper sheds light on how growth of young firms is affected by expansive strategies and the socioeconomic heritage of their main actors. "Socioeconomic heritage" has to do with socialization, prior socioeconomic circumstances, and regional growth conditions; the term is elaborated upon and further defined in this study. The empirical analysis is carried out both for West Germany - a mature market economy - and for East Germany, which operated under a centrally planned economy until German reunification in 1990. The main finding of the paper is that the involvement of West Germans in East German start-ups has a favourable effect on these firms' chances to grow rapidly. This effect is attributed to the fact that West Germans are more likely to possess person-related and situation-related factors necessary for growing a business in a market economy. The results are more ambiguous as to the influence of expansive strategies on fast growth.

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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2009-092.

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Date of creation: 06 Nov 2009
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Handle: RePEc:jrp:jrpwrp:2009-092

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Related research

Keywords: Entrepreneurship; Rapid firm growth; Strategy; Management; West Germany; East Germany;

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Cited by:
  1. Sven-Olov Daunfeldt & Niklas Elert & Dan Johansson, 2011. "Industrial Variation of High-Growth Firms," ERSA conference papers ersa10p1658, European Regional Science Association.
  2. Dan Johansson & Sven-Olov Daunfeldt, 2011. "What explains the presence of High-growth firms in industries?," ERSA conference papers ersa10p1500, European Regional Science Association.

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