Evolution of knowledge intensive firms: a sociogeographic demand side perspective
This paper investigates the contextual conditions affecting the entry, growth and exit of knowledge intensive firms. On the aggregate or regional level, entry and exit are often intimately related. We suggests that the entrepreneurial process by which individuals engage in the start, the growth, and the exit of a firm is strongly path-dependent. Second, based on the importance of initial conditions at the regional level, we present empirical analysis on how characteristics of the economic milieu of regions influence firm births. The data material provides information on all knowledge intensive start-ups across the 286 Swedish municipalities between 1994 and 2002. We present an empirical model that captures both supply- and demand-side factors, with a specific emphasis on the demand side. We address the imperative role of initial conditions during firm founding, as these are strongly emphasized by I/O economics, organizational ecology, and entrepreneurship research alike. We describe and explain the substantial variation in start-up rates across municipalities and over time. The paper advanced econometric analysis where we use a number of variables derived from our theoretical framework to formulate and test a model of regional start-up rates. The model is tested on separate samples of services firms and manufacturing firms, yielding interesting results that are in line with the theories of organizational ecology and economic geography, but with somewhat stronger results for start-ups in services. Analyses of firm growth an survival further shows that the factors present during founding are strongly path-dependent, but differ for medium-growth and high-growth firms, and for firms exiting by closure and firms exiting by merger.
|Date of creation:||Sep 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.ersa.org
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thomas Grebel & Andreas Pyka & Horst Hanusch, 2001.
"An Evolutionary Approach to the Theory of Entrepreneurship,"
Discussion Paper Series
206, Universitaet Augsburg, Institute for Economics.
- Thomas Grebel & Andreas Pyka & Horst Hanusch, 2004. "An evolutionary approach to the theory of entrepreneurship," Chapters, in: Applied Evolutionary Economics and Complex Systems, chapter 7 Edward Elgar.
- Thomas Grebel & Andreas Pyka & Horst Hanusch, 2003. "An Evolutionary Approach to the Theory of Entrepreneurship," Industry and Innovation, Taylor & Francis Journals, vol. 10(4), pages 493-514.
- Paul M Romer, 1999.
"Endogenous Technological Change,"
Levine's Working Paper Archive
2135, David K. Levine.
- William P. Barnett & Elizabeth G. Pontikes, 2008. "The Red Queen, Success Bias, and Organizational Inertia," Management Science, INFORMS, vol. 54(7), pages 1237-1251, July.
- Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
- Michael S. Dahl & Olav Sorenson, 2008. "The Social Attachment to Place," DRUID Working Papers 08-24, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Karl Wennberg & Göran Lindqvist, 2010. "The effect of clusters on the survival and performance of new firms," Small Business Economics, Springer, vol. 34(3), pages 221-241, April.
- Bo Carlsson & Gunnar Eliasson, 2003. "Industrial Dynamics and Endogenous Growth," Industry and Innovation, Taylor & Francis Journals, vol. 10(4), pages 435-455.
- Klepper, Steven, 1997. "Industry Life Cycles," Industrial and Corporate Change, Oxford University Press, vol. 6(1), pages 145-81.
- Granstrand, Ove & Sjolander, Soren, 1990. "The acquisition of technology and small firms by large firms," Journal of Economic Behavior & Organization, Elsevier, vol. 13(3), pages 367-386, June.
- Picot, Garnett & Dupuy, Richard, 1998. " Job Creation by Company Size Class: The Magnitude, Concentration and Persistence of Job Gains and Losses in Canada," Small Business Economics, Springer, vol. 10(2), pages 117-39, March.
- Scott Shane & Toby Stuart, 2002. "Organizational Endowments and the Performance of University Start-ups," Management Science, INFORMS, vol. 48(1), pages 154-170, January.
- Michael Porter, 2003. "The Economic Performance of Regions," Regional Studies, Taylor & Francis Journals, vol. 37(6-7), pages 549-578.
- Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
- Colin Mason & Richard Harrison, 2006. "After the exit: Acquisitions, entrepreneurial recycling and regional economic development," Regional Studies, Taylor & Francis Journals, vol. 40(1), pages 55-73.
- Granstrand, Ove & Sjölander, Sören, 1990. "The Acquisition of Technology and Small Firms by Large Firms," Working Paper Series 213, Research Institute of Industrial Economics.
- Frank, Murray Z, 1988. "An Intertemporal Model of Industrial Exit," The Quarterly Journal of Economics, MIT Press, vol. 103(2), pages 333-44, May.
- Dunne, T. & Roberts, M.J. & Samuelson, L., 1988.
"The Growth And Failure Of U.S. Manufacturing Plants,"
1-87-5, Pennsylvania State - Department of Economics.
- Dunne, Timothy & Roberts, Mark J & Samuelson, Larry, 1989. "The Growth and Failure of U.S. Manufacturing Plants," The Quarterly Journal of Economics, MIT Press, vol. 104(4), pages 671-98, November.
- Dunne, Paul & Hughes, Alan, 1994. "Age, Size, Growth and Survival: UK Companies in the 1980s," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 115-40, June.
- Jovanovic, B. & MacDonald, G., 1993.
"The Life Cycle of a Competitive Industry,"
93-34, C.V. Starr Center for Applied Economics, New York University.
- Jovanovic, B. & MacDonald, G.M., 1992. "The Life-Cycle of Competitive Industry," Papers 92-09, Rochester, Business - Financial Research and Policy Studies.
- Boyan Jovanovic & Glenn MacDonald, 1993. "The Life-Cycle of a Competitive Industry," NBER Working Papers 4441, National Bureau of Economic Research, Inc.
- Boone, Christophe & van Witteloostuijn, Arjen, 1996. " Industry Competition and Firm Human Capital," Small Business Economics, Springer, vol. 8(5), pages 347-64, October.
- Rao, Hayagreeva, 2004. "Institutional activism in the early American automobile industry," Journal of Business Venturing, Elsevier, vol. 19(3), pages 359-384, May.
- Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa10p1585. 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: (Gunther Maier)
If references are entirely missing, you can add them using this form.