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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.

Suggested Citation

  • Michael Wyrwich, 2009. "Socioeconomic heritage and rapid firm growth," Jena Economic Research Papers 2009-092, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2009-092
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    File URL: http://www.wiwi.uni-jena.de/Papers/jerp2009/wp_2009_092.pdf
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    Cited by:

    1. Dan Johansson & Sven-Olov Daunfeldt, 2011. "What explains the presence of High-growth firms in industries?," ERSA conference papers ersa10p1500, European Regional Science Association.
    2. Sven-Olov Daunfeldt & Niklas Elert & Dan Johansson, 2016. "Are high-growth firms overrepresented in high-tech industries?," Industrial and Corporate Change, Oxford University Press, vol. 25(1), pages 1-21.
    3. Sven-Olov Daunfeldt & Niklas Elert & Dan Johansson, 2011. "Industrial Variation of High-Growth Firms," ERSA conference papers ersa10p1658, European Regional Science Association.
    4. Michael Fritsch & Elisabeth Bublitz & Alina Sorgner & Michael Wyrwich, 2014. "How much of a socialist legacy? The re-emergence of entrepreneurship in the East German transformation to a market economy," Small Business Economics, Springer, vol. 43(2), pages 427-446, August.

    More about this item

    Keywords

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

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics

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