IDEAS home Printed from https://ideas.repec.org/a/ids/ijtlid/v2y2009i3p139-172.html
   My bibliography  Save this article

What makes firms grow in developing countries? An extension of the resource-based theory of firm growth and empirical analysis

Author

Listed:
  • Keun Lee
  • Tilahun Temesgen

Abstract

This paper examines what makes firms grow using the investment climate survey that was conducted by the World Bank in eight developing countries. We rely on the resource-based theory of the firm that was proposed by Penrose (1959) where firm growth depends on the kinds and amount of the diverse resources a firm has. The paper extends Penrose's original idea to accommodate diverse options for firm growth and finds the following. First, in low-growth (capability) firms, growth is contributed by basic resources such as physical capital and human capital, whereas in high-growth firms, by higher-level resources such as managerial capital and Research and Development (R&D) capital. Second, the difference between low- versus high-growth firms has more to with the effectiveness of the relevant resources and less with the difference in the amount of resources. Third, export orientation and conglomeration are the most important strategies for firm growth, compared to networking with other local, State-Owned Enterprises (SOEs) or foreign firms.

Suggested Citation

  • Keun Lee & Tilahun Temesgen, 2009. "What makes firms grow in developing countries? An extension of the resource-based theory of firm growth and empirical analysis," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 2(3), pages 139-172.
  • Handle: RePEc:ids:ijtlid:v:2:y:2009:i:3:p:139-172
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=23026
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Johannes Van Biesebroeck, 2007. "Complementarities in automobile production," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1315-1345.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:pal:eurjdr:v:29:y:2017:i:2:d:10.1057_s41287-016-0010-2 is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijtlid:v:2:y:2009:i:3:p:139-172. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Darren Simpson). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=240 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.