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Firm resources, dynamic capabilities, and the early growth of firms

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  • Petra Gibcus
  • F. Stam

Abstract

The early growth of firms is a dynamic process that is difficult to manage and to analyse. Accordingly methodological difficulties have been identified in many studies. This paper uses systematic cohort and longitudinal methodologies to analyse the relationship between dynamic capabilities and new firm growth. Using a panel study of 647 firms, we examine how new firm growth is related to dynamic capabilities. We found no evidence of any effect of dynamic capabilities on the growth of new firms. A longitudinal analysis of the data reveals that especially firm investments over time drive subsequent firm growth, next to growth intentions.

Suggested Citation

  • Petra Gibcus & F. Stam, 2012. "Firm resources, dynamic capabilities, and the early growth of firms," Scales Research Reports H201219, EIM Business and Policy Research.
  • Handle: RePEc:eim:papers:h201219
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    File URL: http://www.entrepreneurship-sme.eu/pdf-ez/H201219.pdf
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    References listed on IDEAS

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    1. G. Page West III, 2001. "The Achilles Heel of Firm Strategy: Resource Weaknesses and Distinctive Inadequacies," Journal of Management Studies, Wiley Blackwell, vol. 38(3), pages 417-442, May.
    2. P.A. Geroski & José Mata & Pedro Portugal, 2003. "Founding Conditions and the Survival of New Firms," Working Papers w200301, Banco de Portugal, Economics and Research Department.
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    4. Michael T. Hannan & James N. Baron & Greta Hsu & Ozgecan Koçak, 2006. "Organizational identities and the hazard of change," Industrial and Corporate Change, Oxford University Press, vol. 15(5), pages 755-784, October.
    5. Stuart, Robert W. & Abetti, Pier A., 1990. "Impact of entrepreneurial and management experience on early performance," Journal of Business Venturing, Elsevier, vol. 5(3), pages 151-162, May.
    6. Garnsey, Elizabeth, 1998. "A Theory of the Early Growth of the Firm," Industrial and Corporate Change, Oxford University Press, vol. 7(3), pages 523-556, September.
    7. Constance E. Helfat & Marvin B. Lieberman, 2002. "The birth of capabilities: market entry and the importance of pre-history," Industrial and Corporate Change, Oxford University Press, vol. 11(4), pages 725-760, August.
    8. Bottazzi, Giulio & Secchi, Angelo, 2003. "Why are distributions of firm growth rates tent-shaped?," Economics Letters, Elsevier, vol. 80(3), pages 415-420, September.
    9. Del Monte, Alfredo & Papagni, Erasmo, 2003. "R&D and the growth of firms: empirical analysis of a panel of Italian firms," Research Policy, Elsevier, vol. 32(6), pages 1003-1014, June.
    10. Steven Klepper, 2002. "The capabilities of new firms and the evolution of the US automobile industry," Industrial and Corporate Change, Oxford University Press, vol. 11(4), pages 645-666, August.
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