growth paths and survival chances an application of gambler s ruin theory this paper links new firm survival with growth with a focus on the patterns in firms growth paths we theorise a gambler s ruin framework by arguing that new firm performance is best modelled as a random walk process but that survival is nonrandom and depends primarily on the stock of accumulated resources a firm s resources are either there when the business begins or are generated by successful periods wins the empirical section tracks over six years the sales and survival non survival of 6247 uk start ups which all began trading in the same quarter of 2004 we do not find strong evidence in favour of a taxonomy of growth paths because we observe that every possible growth path seems to occur with roughly equal probability however we observe that growth paths influence subsequent survival controlling for lagged size we observe that longer lags of growth and even start up size have significant effects on survival

beyond gdp the quest for a measure of social welfare this paper critically examines the various approaches to the measurement of individual well being and social welfare that have been considered for the construction of alternatives to gdp special attention is devoted to recent developments in the analysis of sustainability in the study of happiness in the theory of social choice and fair allocation and in the capability approach it is suggested in the conclusion that although convergence toward a consensual approach is not impossible for the moment not one but three alternatives to gdp are worth developing jel i31 e23 e01

learning and wage dynamics we develop a dynamic model of learning about worker ability in a competitive labor market the model produces three testable implications regarding wage dynamics 1 although the role of schooling in the labor market s inference process declines as performance observations accumulate the estimated effect of schooling on the level of wages is independent of labor market experience 2 timeinvariant variables correlated with ability but unobserved by employers such as certain test scores are increasingly correlated with wages as experience increases and 3 wage residuals are a martingale we present evidence from the nlsy that is broadly consistent with the model s predictions

the effect of crises on firm exit and the moderating effect of firm size abstract the liability of smallness assumption suggests that smaller firms face higher exit risks however does it apply during crises we show that during downturns size reduces firms exit risk by less the hazard rate increases more rapidly in size

occupational mobility occupation distance and specific human capital abstract distance and direction measures are constructed and used to contrast occupational mobility following involuntary job displacement and total occupational mobility displacement involves specific capital loss some voluntary occupational mobility for example promotions reflects augmented skills rather than specific human capital loss wage losses following displacement are strongly related to distance and direction this is reflected in a downward shift in the skill portfolio by contrast the skill portfolio change in total occupational mobility shows a neutral or modest upward pattern suggesting limited or no specific human capital loss from voluntary occupational mobility the mean distance in occupational mobility following displacement declined significantly in the 1980s and 1990s suggesting the labor market was more efficiently reemploying workers following displacement lowering displacement costs in that period

a major in science initial beliefs and final outcomes for college major and dropout taking advantage of unique longitudinal data we provide the first characterization of what college students believe at the time of entrance about their final major relate these beliefs to actual major outcomes and provide an understanding of why students hold the initial beliefs about majors that they do the data collection and analysis are based directly on a conceptual model in which a student s final major is best viewed as the end result of a learning process we find that students enter school quite optimistic about obtaining a science degree but that relatively few students end up graduating with a science degree the substantial overoptimism about completing a degree in science can be attributed largely to students beginning school with misperceptions about their ability to perform well academically in science copyright 2014 oxford university press

entrepreneurs perceived chances for success abstract entrepreneurs involved in planning or starting firms must engage in a continuing process of appraising prospects for success these assessments presumably bear upon the preparations they make as well as at some later point whether they decide to make major changes or even to discontinue the business in this study data from 2994 entrepreneurs who had recently become business owners were analyzed to determine their perceived changes of success although previous evidence on business survival led to the hypothesis that the entrepreneurs would only be cautiously optimistic this was not the case they perceived their prospects as very favorable with 81 seeing odds of 7 out of 10 or better and a remarkable 33 seeing odds of success of 10 out of 10 in considering the prospects for other businesses like their own they perceived odds which were significantly lower but still moderately favorable based upon previous research on factors associated with new business success it was hypothesized that those who were more likely to succeed based upon their personal backgrounds and the nature of their new firms would be more optimistic however this was not the case those who were poorly prepared were just as optimistic as those who were well prepared at this point shortly after having become business owners the assessment by entrepreneurs of their own likelihood of success was dramatically detached from past macro statistics from perceived prospects for peer businesses and from characteristics typically associated with higher performing new firms the psychological literature on post decisional bolstering suggests that decision makers in many settings tend to bolster or exaggerate the attractiveness of an option after it has been chosen this coupled with the tendency of entrepreneurs to believe that they can control their own destinies implies that the extreme optimism observed here is probably a typical occurrence for entrepreneurs the findings suggest that it is probably natural to experience feelings of entrepreneurial euphoria when first becoming a business owner with the available evidence it is difficult to judge whether this leads to inadequate preparations or an inability to diagnose problems and make adjustments after the business is started this extreme optimism probably does contribute to the heavy personal commitments observed here in which the median entrepreneur devoted more than 60 hours per week to the business the entrepreneur would seem well advised to form relationships with outsiders such as board members and professional advisors who can be objective and detached in diagnosing problems and assessing objectively the prospects for the business in its current form

persistence survival and growth a closer look at 20 years of fast growing firms in austria for survival persistence and growth hifs show a much higher persistence than hgfs the average growth rate after the high growth episode is quite modest for both hifs and hgfs policy implications of the ndings are discussed

discrimination in an equilibrium search model i construct an equilibrium search model where some employers have a distaste for hiring minority workers and show that this bias results in economic discrimination against minority workers although only unprejudiced firms hire minority workers minority workers receive lower wages than workers not facing discrimination whenever any employers in the market have a distaste for minority workers one implication of the model is that gender or racial wage differentials understate the utility loss from discrimination in addition the wages of minority workers increase when their proportion increases in the labor market

are high growth firms one hit wonders evidence from sweden most firms do not grow and a small number of high growth firms seem to create most new jobs these firms have therefore received increasing attention among policymakers the question is whether high growth tends to persist we investigate this question using firm level data from sweden during 1997 2008 we find that high growth firms had declining growth rates in the previous 3 year period and their probability of repeating high growth rates was very low thus these are essentially one hit wonders and it is doubtful whether policymakers can improve economic outcomes by targeting them

aggregate consumer behaviour and the measurement of inequality this paper presents an approach to inequality measurement based on an econometric model of aggregate consumer behaviour the novel feature of this model is that systems of individual demand functions can be recovered uniquely from the system of aggregate demand functions we present methods for evaluating social welfare based on an explicit social welfare function this social welfare function incorporates measures of individual welfare based on indirect utility functions for all consumer units we develop indexes of inequality based on actual and potential levels of social welfare

personal networks and firm competitive strategy a strategic or coincidental match abstract this article is based upon the premise that the personal network of the owner manager is the most important resource upon which he or she can draw in the early days of the firm s development this is particularly the case as the concept of personal networks is sufficiently general to include dimensions that include for example attention to customers understanding of the business market orientation or stress on quality as such it is intuitively obvious that the nature and use of these networks must impinge upon the resultant strategy adopted in the firm albeit often implicit rather than explicit however as yet there is no empirical evidence to support this conclusion therefore this article probes one question how do the characteristics of the owner manager s network relate to the competitive strategy of new ventures clearly within this we expected to find relationships that were logically consistent the research was conducted in two counties in england that possessed similar industrial structures and equal rates of new firm formation a list of firms was obtained from local business directories and all 629 firms that fit the criteria were contacted by telephone validation of the firms at this point resulted in a significant reduction in those that fit the sampling criteria four hundred twenty three firms were mailed an 11 page questionnaire resulting in a 52 response rate preliminary analysis of the strategy variables identified six components that were consistent with previous literature these were labeled as marketing differentiation product innovation market segmentation distribution growth through outside capital and differentiation through quality correlation of these components with the networking characteristics of propensity to network network activity network density network intensity and content of network exchanges supports our proposition that entrepreneurs differ in their networking activities according to the competitive strategy pursued by the firm further classification of the owner managers into strategic clusters demonstrates that most firms appear to follow multiple patterns of strategic behavior moreover the comparison with the networking characteristics shows that owner managers appear to differ in a logical manner in the use of their networks bailey montera and cardow 1992 argue that a firm s resource base consists of financial physical and human resources and that the manner in which those resources interact is determined by the firm s strategy previous research on entrepreneurial networks has shown the amount of time and energy the owner manager devotes to the development and maintenance of contacts the underlying assumption of social network theory is that through a personal network the owner manager of a new venture gathers access to critical resources which for a variety of reasons the new firm does not possess internally consequently this research has argued that this resource base cannot be ignored when attempting to understand the concept of strategy among new and small firms in fact this resource base may play a dominant role in formulating as well as implementing strategy

creating good public policy to support high growth firms writing in small business economics scott shane argues that policy makers should stop subsidising start ups and instead focus on supporting the small subset of new businesses with high growth potential however both shane and other scholars who have made the same argument only offer broad brush proposals to achieve this objective the aim of this article in contrast is to engage in a detailed discussion of how to create appropriate policies for high growth firms hgfs drawing on research in scotland we argue that policy makers are looking for hgfs in the wrong places the heterogeneous nature of hgfs in terms of sector age size and origins makes in impractical to target support on particular sectors technologies or types of firms e g new or r d intensive the article proposes a reorientation of hgfs both in terms of appropriate targeting and forms of support public policy also needs to focus on the retention of hgfs which are acquired by non local businesses finally policy makers need to properly reflect upon the specificities of their entrepreneurial environment when devising appropriate policy interventions

threats and opportunities faced by private businesses in china abstract this article presents a comprehensive analysis of the environment experienced by private businesses in china through examining their relationships with the major stakeholders namely government supplier employee customer and competitor since the announcement of the economic reform in 1978 substantial political and economic power has been delegated from the central government to the regions endowed with this power local governments have crucial influence on the size of the private sector within their jurisdiction being outside the state allocation plan private firms have less access to raw materials and credit in the volatile political climate of china they are vulnerable to attack during political campaigns maintaining a cordial relationship with local cadres through paying bribes and various charges is thus a prerequisite for survival having solicited political backing a private entrepreneur can not only run his business more smoothly but also may be more tolerated in his illegal activities such as tax evasion profiteering and selling banned products in short the whole situation can be described as a collusion of local governments and private businesses at the expense of the central government s interest under the economic reform the distribution system has become less rigid than before it is easier for private firms to secure supplies whether raw materials or manufactured goods labor input is also not a problem for most private firms which are small in size and employ mainly unskilled workers however large private enterprises have to compete with state collective and foreign enterprises for managerial staff who are in short supply there have been marked changes in the consumption pattern since the early 1980s people spend less on staple foods and more on non staple foods consumer goods and services moreover china is experiencing a consumption boom altogether this offers great opportunities to the private sector which has been expanding its share of industrial output and retail sales very fast on the other hand competition is becoming much keener state enterprises are improving their efficiency and giant multinational corporations are rushing in as there are few entry barriers private entrepreneurs are also competing fiercely among themselves the ideological contradiction of having labor exploitation by private entrepreneurs in a socialist country has prevented the chinese government from actively encouraging private business the private sector has been assigned a supplementary role in the dominant public economy this status has led to discrimination against private firms in obtaining factor inputs accounting partly for their vulnerability to bureaucratic harassment by local cadres this will continue to hamper private business development it is concluded that ideological and political reforms in addition to the economic reform are required for providing a more conducive environment for private businesses the chinese experience of liberalizing the private sector offers useful insights to governments of other developing countries

gibrat s law and persistence of growth in greek manufacturing this study makes use of a sample of greek manufacturing firms during 1995 2001 in order to analyze gibrat s law we find gibrat s law is rejected for the total sample of firms since persistence of growth plays a key role the classification of firms in size and age groups however yields more interesting results gibrat s law is rejected for micro small and young firms since an inverse relationship between firm growth and initial firm size is found along with a persistence of growth rates in subsequent periods in contrast gibrat s law is accepted for medium large and old firms implying that the growth patterns of these categories follow a random walk and do not tend to persist in subsequent periods

corporate growth and industrial structures some evidence from the italian manufacturing industry this work analyses the properties of corporate growth in a large longitudinal sample of italian manufacturing firms in particular it focuses on the statistical properties of growth rates and on the influence of proxies for relative efficiency upon relative growth in line with previous work the emergence of fat tails in growth rate distributions and the idiosyncratic nature of autocorrelation coefficients confirm the existence of a structure in the growth process richer than the one normally assumed by the gibrat law hypothesis and suggest the presence of firm specific drivers of growth at the same time there is a remarkable puzzle concerning the absence of any negative relationship between size and growth variance and only weak influences of relative efficiencies upon growth dynamics

the distributional impact of price changes in hungary and the united kingdom in soviet type economies commodity prices were distorted as part of the redistributive system of the state but with the transition prices have been liberalized and taxes made more uniform has this change adversely affected the distribution of purchasing power this paper develops a new method of measuring the distributional impact of price changes by computing the distributional characteristics of commodities from household budget survey data and applies it to hungary and the united kingdom finding that the distributional impacts over the past decade were negligible and not significantly different from zero in both cases copyright 1995 by royal economic society

contribution of new technology based firms to the strengthening of technological capabilities in intermediate economies this paper argues that the main contribution of new technology based firms ntbfs is their technological dynamism which invests them with two major roles a challenging role implicit in their creation whereby they break with the inertia of existing organisations and a more long standing technology transfer role acting as a source of new technologies which they acquire and deliver by several means the performance of these roles can be particularly valuable in less advanced economies contributing to a strengthening of the indigenous capabilities in new technologies empirical research on a sample of portuguese ntbfs has shown that these firms have indeed performed an important function by accessing new technological knowledge both from local public research and from more advanced countries which they further developed turned into marketable applications and commercialised but the conditions found in an intermediate economy such as portugal present ntbfs with particular problems the limited number of knowledgeable users prepared to adopt their products and the firms difficulty to reach other type of clients can be a major obstacle to their development therefore if the country is to profit from ntbfs challenging behaviour and technological competences their acquisition and diffusion efforts should be backed and complemented by demand oriented policies

age size growth and survival uk companies in the 1980s this paper examines growth and survival amongst quoted and unquoted u k companies in the period 1975 85 and compares the results with earlier u k and u s studies an examination of death rates shows that smaller companies had higher death rates but the largest and smallest companies were least vulnerable to takeover careful attention is therefore paid to problems of sample selection bias it is shown that smaller companies grew faster than larger companies that gibrat s law does not hold amongst smaller firms that age is negatively related to growth and that these results are not an artifact of sample selection bias copyright 1994 by blackwell publishing ltd

the social cost of living index abstract household cost of living indexes reflect household preferences analogous indexes for groups of households require a corresponding concept of group preferences in this paper i investigate the social cost of living index a group index based on the bergson samuelson social welfare function i first define the index and examine its properties under the assumption that the investigator constructing it expresses his distributional judgments in an explicit bergson samuelson social welfare function i then examine the maximizing society and the independent society two cases in which the index can be constructed from the information contained in the market demand functions in these two cases a laspeyres index i e the fixed weight index based on the reference consumption pattern is an upper bound on the exact social cost of living index in general however the assumptions required to place bounds on the social cost of living index are much more likely to be satisfied than those required to place analogous bounds on a household s cost of living index

a democratic measure of household income growth theory and application to the united kingdom this paper develops a price and quantity system of indicators structured round atkinson s concept of inequality aversion a democratic indicator of income growth weighting each household s growth experience equally is shown to result when prais democratic price index is used to deflate the geometric mean of equivalised household income a welfare interpretation of the democratic indicator of income growth is provided and it is shown that with heterogeneous but homothetic preferences the deflator can serve as a common scaling social cost of living index when applied to income as well as to consumption application to united kingdom household data suggests that over the interval 2005 6 2015 6 democratic real equivalised household income grew by 0 20 per cent per annum while the plutocratic equivalent grew by 0 52 per cent per annum

networks in entrepreneurship the case of high technology firms the value of networks as an integral part of the explanation of entrepreneurial success is widely acknowledged however the network perspective does not specify the role of networks in the emergence and early growth of a venture we have distinguished three entrepreneurial processes in new venture development i e discovery of opportunities securing resources and obtaining legitimacy which are of importance for survival and performance this paper examines how these processes are influenced by strong and or weak ties and whether the degree of innovation incremental versus radical acts as a contingency factor in the way network ties support entrepreneurial processes in this explorative study three cases on high technology firms in the netherlands provide empirical material enabling us to develop a number of propositions on the network effect in particular the mix of strong and weak ties on the three entrepreneurial processes

corporate growth and industrial dynamics evidence from french manufacturing this work explores basic properties of the size and growth rates distributions of firms at the aggregate and disaggregate levels using an extensive dataset on french manufacturing firms we investigate which properties of firm size distributions and growth dynamics characterize the aggregate dynamics and are at the same time robust under disaggregation our analysis is based on non linear robust regression methods which have never been applied before to this kind of data the growth rates distributions we observe are well described by a subbotin distribution with a shape parameter significantly lower than 1 suggesting a noticeable departure from the laplace behavior reported in previous works on italian and us data at the same time the variance of growth rates depends negatively on size and the relationship does not seem to be linear with larger firms possibly displaying lower variability in their growth dynamics at the disaggregate level we observe significant heterogeneity in the firm size distributions across sectors while the shape of the sectoral growth rates density displays a surprising degree of homogeneity

whom do high growth firms hire we study employment and new hires among high growth firms hgfs in the swedish knowledge intensive sectors 1999 2002 using matched employer employee data we find that hgfs are more likely to emp

the growth of us credit unions abstract the growth of us credit unions during the 1990s is investigated empirically using univariate and multivariate cross sectional and panel estimation techniques univariate tests of the law of proportionate effect suggest that in general large credit unions grew faster than their smaller counterparts on average credit unions with above average growth in one period tended to experience below average growth in the next smaller credit unions tended to have more variable growth than large ones while credit unions share a common co operative philosophy they differ in terms of age profile scope for membership growth charter type and financial structure and performance in estimations of a multivariate growth model most of these characteristics are found to have a significant influence on the size growth relationship while large state chartered credit unions grew faster than their smaller counterparts the reverse was true for federally chartered credit unions in general if larger credit unions grew faster than smaller ones they tended to do so for specific reasons because their charters were less restrictive because they were more efficient or because they had a financial structure that was more conducive to growth therefore credit union growth was not random but highly systematic

the transition to a market economy pitfalls of partial reform we present a theory of a partial economic reform of a planned economy similar to the one that took place in russia since 1988 and in china earlier in such a reform some markets are liberalized in the sense that producers can sell output to whomever they want including private firms at free prices but at the same time must sell to state firms at state prices we show that such a reform can result in a substantial diversion of subsidized inputs away from state firms and toward private firms even when state firms value these inputs more the result may be a reduction of total output the simple analysis sheds light on many consequences of the soviet reform such as breakdown of coordination of production increased state policing of delivery quotas prohibitions of trading cooperatives and opposition to privatization the model also explains why partial reform failed in russia but worked in china

prejudice and wages an empirical assessment of becker s the economics of discrimination we test the predictions from becker s 1957 seminal work on employer prejudice and find that relative black wages a vary negatively with the prejudice of the marginal white in a state b vary negatively with the prejudice in the lower tail of the prejudice distribution but are unaffected by the prejudice of the most prejudiced persons in a state and c vary negatively with the fraction of a state that is black our estimates suggest that one quarter of the racial wage gap is due to prejudice with nontrivial consequences for black lifetime earnings

predicting new venture survival and growth does the fog lift this paper investigates whether new venture performance becomes easier to predict as the venture ages does the fog lift to address this question we primarily draw upon a theoretical framework initially formulated in a managerial context by levinthal adm sci q 36 3 397 420 1991 that sees new venture sales as a random walk but survival being determined by the stock of available resources proxied by size we derive theoretical predictions that are tested with a 10 year cohort of 6579 uk new ventures in the uk we observe that our ability to predict firm growth deteriorates in the years after entry in terms of the selection environment the fog seems to thicken however our survival predictions improve with time implying that the fog does lift

networking and growth of young technology intensive ventures in china abstract more often than not new ventures lack established products known technologies longstanding customer relations experienced managerial teams sufficient capital and strong reputations almost by definition small new firms lack the resources of many larger established firms the task of an infant firm and a measure of its success is to make a transition from being resource weak to being resource strong how can resources that are critical for profitable growth be acquired for the resource weak new venture researchers have found that entrepreneurs can gain access to valuable resources and they can seek to achieve competitive advantage through networking activities forming and utilizing available relationships with external organizations can allow entrepreneurs to build credibility gain advice financing and customer access build a positive image and obtain resources at below market prices and obtain channel access information and innovations business relationships with other organizations allow an entrepreneur to achieve desired business results through asset parsimony a favorable view toward networking for new ventures leaves a number of unanswered questions however relevant research questions might include who should the entrepreneur seek as a business partner are all inter organizational relationships equal or are some types more valuable to new ventures than other relationships do firms relying on high levels of networking activities actually outperform firms that less actively seek resources through external organizational relationships the present study provides a specific understanding of the concept of networking for entrepreneurs we propose that networking can be understood in terms of range the number of external relationships to obtain resources and of intensity the frequency of contact of and amount of resource obtained from these relationships this research project evaluates the range and intensity of networking among high growth and low growth entrepreneurial ventures extensive interviewing with managers of six young technology oriented firms in the people s republic of china prc affirmed the importance of entrepreneurial networking managers in the three high growth firms reported greater range and intensity of business networking than did managers of three low growth firms matched by industry and age moreover the relationship between networking activities and growth transcended the stage of firm development where networking range and intensity are deemed important in the growth process new venture success may call for entrepreneurs to reach out deliberately to external organizations to capture needed resources to a certain extent such networking activities run counter to important entrepreneurial motivations of independence and autonomy the concept of networking and the results of this study imply that entrepreneurs need to combine the spirit of independence with the reality of resource dependence and they need to balance personal autonomy with strategic business relationships this study also contributes to the understanding of entrepreneurship in our increasingly global economy particularly in the prc business relationships between the united states and the prc have been expanding rapidly in the last decade many foreign businesses seek license agreements joint venture partners equity participation or channel relationships with young ventures in that country do the same rules of networking apply in the prc as the literature suggests apply in the united states new ventures in this study were found to engage in processes of networking activities consistent with those in the west although networking activities may have different cultural roots firm success appeared influenced by the same principles of networking

are emily and greg more employable than lakisha and jamal a field experiment on labor market discrimination we study race in the labor market by sending fictitious resumes to help wanted ads in boston and chicago newspapers to manipulate perceived race resumes are randomly assigned african american or white sounding names white names receive 50 percent more callbacks for interviews callbacks are also more responsive to resume quality for white names than for african american ones the racial gap is uniform across occupation industry and employer size we also find little evidence that employers are inferring social class from the names differential treatment by race still appears to still be prominent in the u s labor market jel j71 j64

spillovers from high growth firms evidence from hungary how do high growth firms hgfs affect the rest of the economy we explore this question using hungarian administrative microdata relying on the birch definition of hgfs we find evidence for stronger productivity growth for firms operating in industries with more hgfs and for firms supplying industries with more hgfs knowledge spillovers or the surge of hgfs demand for intermediate inputs could explain these positive associations firms with intermediate productivity levels seem most likely to benefit from this effect while we find no differences by age or export status the results hold irrespective of the level of spatial aggregation and are robust to alternative definitions of hgfs as well as different measures of productivity or spillover

the concept of income in a general equilibrium this paper derives a concept of aggregate real income for a competitive economy in general equilibrium consisting of heterogeneous infinitely lived people and relates it to current and future consumption possibilities an important characteristic of our measure of income which we call real income is that deflation is carried out using a consumption deflator rather than any price index of output we suggest that it may be inappropriate to regard capital gains as income we also present a coherent treatment of the effects of changes to the terms of trade on real income and explain the implications of this for resourceexporting economies hicks 1939 defined income as the maximum amount a man can spend and still be as well off at the end of the week as at the beginning since then there has been a succession of attempts to apply this definition the problem is as hicks acknowledged that the correct interpretation of as well off is by no means clear weitzman 1976 and asheim 1997 suggest that income is equal to the level of consumption which could be sustained indefinitely out of the capitalized value of current income and equate this to being as well off at the end of the week as at the beginning eisner 1988 argues specifically that in a total incomes system effects arising from asset price changes and conventionally regarded as capital gains should be included with income here building on earlier work by sefton and weale 1996 asheim and weitzman 2001 and pemberton and ulph 2001 we provide a comprehensive account of the implications of the idea that as well off should be understood to mean that the present discounted value of current and future utility should be unchanged over the interval considered we work in the context of a general equilibrium taking the prices established in the general equilibrium as given we first look at income from the production side showing that in an economy where prices and the interest rates satisfy an intertemporal efficiency condition income along an equilibrium path can be interpreted as a weighted average of the value of the current and future consumption bundle plus a term adjusting for changes in the nominal price level converting prices to real prices by deflating by the divisia consumption price index removes the need for this adjustment these results are suggestive first they offer a way of defining the income of a household entirely in terms of its consumption possibilities second they indicate that to calculate real income deflation is best carried out using a price index of consumption this is a substantial divergence from current national accounting practice third because we have assumed constant returns there is a trivial aggregation result that aggregate income is equal to the sum of the incomes from the individual sectors

firm entry and exit in the canadian manufacturing sector 1970 1982 this paper measures the importance of entry and exit to the canadian manufacturing sector in the 1970s it focuses on the size of entrants as they move from a stage of infancy to adolescence the exit rates of births their length of life and the growth path of entrants are presented distinctions are made between greenfield and merger entry while entrants are small at birth the cumulative effect of successive cohorts of entrants in the 1970s adds up to a significant fraction of all firms and total sales by 1979

the impact of managerial networking intensity and market based strategies on firm growth during institutional upheaval a study of small and medium sized enterprises in a transition economy varying institutional environments provide the foundation for a great deal of international business research yet relatively little empirical work has examined the determinants of small and medium sized enterprise sme growth during institutional upheaval although the importance of sme development for economic transition and growth is widely acknowledged our paper addresses this gap in the literature by examining how the competitive strategies of smes evolve during institutional transitions and assessing the implications for firm growth using data collected from 135 smes in 1993 and 200 smes in 2001 we find that managerial networking intensity i e developing and maintaining relationships that may be used for business purposes declines markedly over time whereas the importance of market based strategies increases managerial networking intensity is strongly associated with firm growth early in the institutional transition process but not later market based strategies are not associated with firm growth in either time period drawing on convergent insights from multiple theoretical perspectives we argue that changes in strategy are concurrently driven by socially constructed norms that legitimize new ways of competing and delegitimize old ones and by knowledge acquisition and learning which provide managers with a more diverse set of tools with which to exercise their strategic choices

beauty productivity and discrimination lawyers looks and lucre we propose models with an ascriptive characteristic generating earnings differentials and causing sectoral sorting allowing us to distinguish among sources producing such differentials we use longitudinal data on a large sample of graduates from one law school and measure beauty by rating matriculation photographs 1 betterlooking attorneys who graduated in the 1970s earned more than others after 5 years of practice an effect that grew with experience 2 attorneys in the private sector are better looking than those in the public sector differences that rise with age these results support theories of dynamic sorting and customer behavior

a quantitative content analysis of the characteristics of rapid growth firms and their founders a group of firms that is attracting attention are rapid growth firms these firms are of particular interest because rapid growth is an indication of market acceptance and firm success by studying rapidgrowth firms researchers can help all firms better understand the attributes associated with firm growth despite these positive outcomes however rapid firm growth is difficult to achieve and maintain this study adds to the literature through a quantitative content analysis of the narrative descriptions of 50 rapid growth firms and a comparison group of 50 slow growth companies the purpose of the study was to draw from the narratives a list of empirically grounded growth related attributes that are associated with rapid growth firms the findings of the study resulted in the advancement of a conceptual model of the attributes of rapid growth firms in four areas founder characteristics firm attributes business practices and human resource management hrm practices

what characterizes a fast growing firm this paper seeks to empirically identify factors that influence the probability of being a fast growing firm in eastern and western germany descriptive analyses have shown that most firms experience only small positive or negative employment growth or stagnate over time the job generation mechanism rests with a handful of firms that increase their employment significantly over time the empirical analysis shows that the probability of being a fast growing firm depends on different factors when separating eastern and western germany as well as using different definitions of fast growing firms moreover the analysis shows that technology intensive manufacturing branches and knowledge based business related services do not generate the majority of fast growing firms

why are distributions of firm growth rates tent shaped abstract recent empirical analyses on different datasets have revealed a common exponential behavior in the shape of the probability density of the corporate growth rates we present new evidence on this topic from the italian manufacturing industry and propose a very simple mechanism that under rather general assumptions provides a robust explanation for the observed regularities

the common scaling social cost of living index if preferences or budgets are heterogeneous across people as they clearly are then individual cost of living indexes are also heterogeneous thus any social cost of living index faces an aggregation problem in this article we provide a solution to this problem that we call a common scaling social cost of living index cs scoli in addition we describe nonparametric methods for estimating such social cost of living indexes as an application we consider changes in the social cost of living in the u s between 1988 and 2000

growth processes of high growth firms as a four dimensional chicken and egg this article investigates whether high growth firms grow in different ways from other firms specifically we analyze how firms grow along several dimensions growth of sales employment assets and operating profits using structural vector autoregressions causal relations are identified by using information contained in the non gaussian growth rate distributions for most firms the growth process starts with employment growth which is then followed by sales growth then growth of operating profits and finally growth of assets in contrast high growth firms put more emphasis on growth of operating profits driving other dimensions of growth with employment growth occurring at the end

explaining the distribution of firm growth rates empirical analyses on aggregated datasets have revealed a common exponential behavior in the shape of the probability density of corporate growth rates we present clear cut evidence on this topic using disaggregated data we explain the observed regularities proposing a model in which firms ability to take up new business opportunities increases with the number of opportunities already exploited a theoretical result is presented for the limiting case in which the number of firms and opportunities go to infinity moreover using simulations we show that even in a small industry the agreement with asymptotic results is almost complete

is there a risk of growing fast the relationship between organic employment growth and firm exit growing firms are the drivers of economic dynamics while the existing literature often focuses on the average effect of growth on firm survival we investigate how survival rates vary across the growth distribution using dutch longitudinal firm level data 1999 2012 we theorize and find a u shaped relationship between organic employment growth and subsequent exit due to firm death in various model specifications low positive growth increases survival too much growth could be harmful for some subgroups of firms and the steepness of the u shape depends on firm age size and industry

aggregate consumer behavior and the measurement of social welfare this paper describes a new approach to normative economics combining the theory of social choice with econometric modeling of aggregate consumer behavior we first derive a system of aggregate demand functions by exact aggregation over individual demand functions we then construct measures of individual welfare from systems of individual demand functions finally we incorporate these measures into a social welfare function introducing ethical assumptions based on horizontal and vertical equity to illustrate the application of this approach we consider the u s standard of living and its cost over the period 1947 1985 the purpose of this paper is to describe a remarkable convergence that has occurred between economic theory and econometrics over the past decade this conjunction has taken place between the theory of social choice and econometric modeling of aggregate consumer behavior the confluence of these two streams of research has produced a new approach to normative economics this approach has been successfully applied to the evaluation of economic policy the measurement of poverty and inequality and the assessment of the standard of living and its cost a common problem in the modeling of consumer behavior and social choice is the representation of individual preferences in the econometric modeling of aggregate consumer behavior the primary emphasis has been on simplifying aggregate demand functions the most familiar approach to this problem is the model of a representative consumer this model is required to justify applications of the theory of individual consumer behavior to aggregate data on prices and quantities consumed the simplest version of the model is based on identical homothetic preferences for all individuals under identical homothetic preferences aggregate quantities consumed are functions of aggregate expenditure and prices these functions have precisely the same properties as demand functions in the theory of individual consumer behavior the condition of identical homothetic preferences was weakened by gorman 1953 to permit displacements from the origin for individual demand functions gorman showed that a necessary and sufficient condition for aggregate demand functions to depend on aggregate expenditure is that all individu

growth acquisition activity and firm size evidence from the united kingdom this paper provides new empirical evidence on the relationship between size growth and acquisition activity of quoted companies in the united kingdom the evidence is based on some two thousand companies and covers the period i960 76 there has been no detailed systematic study for this period the results suggest some revisions to generally accepted views in the area and they have certain implications for industrial and competition policy pursued in the u k and the factors affecting aggregate concentration the paper is arranged as follows section i considers the broader economic context for the study whilst section ii notes some a priori expectations regarding the relationship between size and growth and size and acquisition activity sections iii v present empirical evidence and the last section provides a summary and policy implications of the results

high growth firms introduction to the special section high growth firms hgfs have attracted considerable attention recently as academics and policymakers have increasingly recognized the highly skewed nature of many metrics of firm performance a small number of hgfs drives a disproportionately large amount of job creation while the average firm has a limited impact on the economy this article explores the reasons for this increased interest summarizes the existing literature and highlights the methodological considerations that constrain and bias research this special section draws attention to the importance of hgfs for future industrial performance explores their unusual growth trajectories and strategies and highlights the lack of persistence of high growth consequently while hgfs are important for understanding the economy and developing public policy they are unlikely to be useful vehicles for public policy given the difficulties involved in predicting which firms will grow the lack of persistence in high growth levels and the complex and often indirect relationship between firm capability high growth and macro economic performance

size growth and transnationality among the world s largest banks this essay investigates the relationship between size and growth rate of large international banks and then relates these to the banks degree of transnationality we test two sets of three propositions each the first three propositions are pi that the growth rate of each bank over some period is independent of its size p2 that the variability of growth rates is independent of the banks size and p3 that the banks growth rates in two consecutive periods are independent of each other the second three propositions are p4 that there is no association between size and transnationality p5 that transnationality and growth are independent and p6 that there is no relationship between transnationality and the variability of growth rates the growth referred to is primarily that of assets as a measure of size for the two propositions concerning the variability of growth rates we supplement this measure with one of the market value of the banks equity the results have implications for concentration in internathis paper investigates six propositions relating to gibrat s law of proportionate growth the growth referred to is that of book assets and total market value the results have implications for concentration in international banking and for depositor safety and the social cost of insuring it and provide evidence on economies of scale and on the transnational spread of the industry

relation of dominant problems to stages of growth in technology based new ventures two studies investigating the growth patterns of new ventures are presented in the first study a stage of growth model theorized to apply specifically to technology based new ventures was develop

the economics of formal business networks abstract this paper analyzes the under researched issue of formal business networks comprising voluntary groupings of entrepreneurs who share knowledge and experiences between themselves economic analysis is used to show how formal business networks which enable entrepreneurs to share good and bad practice can improve efficiency and social welfare the paper also derives conditions for the existence and equilibrium size of formal business networks two principles of network design are proposed to promote their stability and to avoid their collapse

productivity market selection and corporate growth comparative evidence across us and europe this paper analyses the patterns of market selection in manufacturing industries of france germany uk and usa we first disentangle the contribution to industry level productivity growth of within firm productivity changes and between firm reallocation of shares the evidence corroborates the notion that within firm learning prevails over market selection forces with larger firms driving such innovation and learning processes second we address the strength of selection by exploring to what extent firm growth rates are shaped by relative productivity levels as compared to variation thereof our key finding is that although changes in relative efficiency have a greater impact on growth than relative efficiency levels there is an overall weak relationship between productivity and growth and therefore a weak power of selection forces in all countries the results hold across firms of different size but we also find that selection bites more on smes

what holds back high growth firms evidence from uk smes high growth firms are seen as vital for economic growth it is important for policy and theory to consider the barriers faced by firms achieving high growth and those with the potential to do so this article uses data for 4 858 uk smes to investigate the obstacles perceived by two sets of firms 1 firms in periods of high growth and 2 potential high growth firms which are observationally similar but are not achieving high growth the results suggest high growth firms perceive problems in six areas recruitment skill shortages obtaining finance cash flow management skills and finding suitable premises potential high growth firms feel held back by the economy obtaining finance cash flow and their management skills but are less likely to perceive regulation is a problem the results have implications for theory on high growth firms and policies focussed at them

what happens to gazelles the importance of dynamic management strategy the starting point of this study is gibrat s law which is contrasted with strategic management this logic is subsequently applied to a group of remarkably dynamic high growth firms gazelles strategic management theory emphasises the importance of firms adjusting strategies in response to changes in the external environment in our study it is used to explain several key empirical findings using a novel british data set containing information on more than 100 gazelles these findings help explain 1 why gibrat s law of random firm growth processes does not generally hold 2 which strategy and environmental variables have a predictable influence on firm performance and 3 why routine application of best practice strategies is unlikely to foster firm growth in a changing economic environment in so doing this paper contributes to the large body of literature on small firm growth

putting tasks to the test human capital job tasks and wages using original representative survey data we document that analytical routine and manual job tasks can be measured with high validity vary substantially within and between occupations are significantly related to workers characteristics and are robustly predictive of wage differences between occupations and among workers in the same occupation we offer a conceptual framework that makes explicit the causal links between human capital endowments occupational assignment job tasks and wages which motivate a roy model of the allocation of workers to occupations we offer two simple tests of the model s gross predictions for the relationship between tasks and wages both of which receive qualified empirical support

why beauty matters we decompose the beauty premium in an experimental labor market where employers determine wages of workers who perform a maze solving task this task requires a true skill which we show to be unaffected by physical attractiveness we find a sizable beauty premium and can identify three transmission channels a physically attractive workers are more confident and higher confidence increases wages b for a given level of confidence physically attractive workers are wrongly considered more able by employers c controlling for worker confidence physically attractive workers have oral skills such as communication and social skills that raise their wages when they interact with employers our methodology can be adopted to study the sources of discriminatory pay differentials in other settings

the law of proportionate effect and oecd bank sectors the paper investigates the growth dynamics of the bank sectors in the oecd area over the period 1985 1994 and examines whether the structural financial reforms of the late 1980s have affected their growth path based on a test of gibrat s law of proportionate effect it is found that the 1985 89 period was characterized by size convergence implying that smaller bank sectors were expanding more rapidly however in the 1990 1994 period the pattern reversed to proportionate growth the analysis of the determinants of bank market growth reveals that macroeconomic growth operational bank efficiency credit quality and capitalization are the main drivers of bank industry growth

firm networks and firm development the role of the relational mix abstract this study examines the role of different networks called the relational mix on the development of the entrepreneurial firm our regression analysis of survey data from 60 venture capital financed firms questions the importance of network size on firm development rather our results suggest that different types of networks are more important for firm development in particular we found a significant positive relationship for reputational networks and a weak significant negative relationship for cooperative technology networks at founding with time to break even social networks at founding have no direct effect on time to break even and a significant negative relationship with sales in the years after foundation furthermore our findings show the important role of marketing information and co opetition networks relationships with direct competitors on firm development in the years after foundation these results suggest that the relational mix is a more appropriate construct for explaining network development than network size alone

human capital specificity evidence from the dictionary of occupational titles and displaced worker surveys 1984 2000 measures of four basic skills constructed from the dictionary of occupational titles are used to examine the source of human capital specificity the measures are used to characterize the skill portfolio of each job and to construct distance measures between jobs wage losses in the displaced worker surveys are shown to be more closely associated with switching skill portfolios than switching industry or occupation code per se these switches represent large decreases in the skill portfolio in the postdisplacement job the recent evidence for industry specific capital is reexamined the results suggest a difference between fluid and crystallized skills

exploring the processes of firm growth evidence from a vector auto regression this article offers many new insights into the processes of firm growth by applying a vector autoregression model to longitudinal panel data on french manufacturing firms we observe the coevolution of key variables such as growth of employment sales gross operating surplus and labor productivity growth preliminary results suggest that employment growth is succeeded by the growth of sales which in turn is followed by growth of profits generally speaking however growth of profits is not followed by much employment growth or sales growth quantile regressions highlight some asymmetries between negative growth and fast growth firms

is subsidizing entry an optimal policy public subsidies in support of new firm foundation are among the most frequently used instruments of industrial policy in the euro zone this paper analyses their effectiveness and efficiency vis a vis some features of the overall process of industry dynamics in italian manufacturing to this end the survival and growth patterns of new small firms are investigated using a unique dataset on electrical and electronic engineering in italy as regards survival our results confirm the findings of other studies namely that the hazard rates are particularly high in the early stages of firm s life cycle as far as growth is concerned the study s main finding is that gibrat s law fails to hold in the years immediately following start up when smaller firms must rush in order to achieve a size large enough to enhance their likelihood of survival conversely in later stages of firm s life cycle the law cannot be rejected these results radically question the use of subsidies as an optimal policy for the support of new entries since the subsidy brings about a major bias in the process of market selection including substitution and deadweight effects and hampers the post entry scale adjustment of newborn firms

the role of contractual governance flexibility in realizing the outcomes of key customer relationships abstract an entrepreneurial firm s relationships with customers suppliers investors universities and other organizations have a significant and long lasting impact on the survival and success of the firm yet little research has focused on how the management of these relationships influences outcomes for entrepreneurial firms this paper focuses on the customer relationships of new technology based firms ntbfs we aim to contribute to the literature on the governance of exchange relationships between ntbfs and their customers further in so doing we seek to explore the implications of such governance for the performance of new firms because of their small size their liabilities of newness and their highly specialized knowledge intensive resources ntbfs are able to maintain only a limited number of close customer relationships consequently ntbfs often become highly dependent on one or a few of their customers in this study we focus on the relationships between ntbfs and their single largest customers we refer to the customer that accounts for the highest proportion of an ntbf s total revenue as the key customer strategic management literature resource dependence theory and transaction cost economics emphasize the risks associated with being dependent on an exchange relationship focusing on the opportunistic use of power by the exchange partner these perspectives suggest that firms can minimize their external dependencies and protect themselves against opportunism through the use of contracts the present paper expands this view by also examining how flexibility in exchange governance may unlock potential benefits or dampen potential dangers that an ntbf faces in its commitment to its single largest customer e g sharing the costs and risks of r d with the customer improving the reputation of the ntbf and realizing savings in sales and marketing costs we examine the extent to which the realization of the potential positive and negative outcomes of a high level of dependence are moderated by the flexibility of the exchange partners attitudes toward contractual agreements the research question that we seek to answer is does the manner in which a contractual agreement is implemented affect the outcomes of a customer relationship for an ntbf at high levels of exchange dependence on the key customer we develop a set of hypotheses that examines how the governance of the key customer relationship affects the ntbf s new product development reputation and sales costs when exchange dependence on the key customer is high we use the term contractual governance flexibility to refer to the extent to which the exchange partners are willing to adjust to changes in the relationship instead of relying on the contract we test the hypotheses with survey data from 195 ntbfs in the uk the results of regression analyses reveal that contractual governance flexibility moderates the relationship between exchange dependence and outcomes in relationships with a high level of exchange dependence greater contractual governance flexibility was associated with greater new product development and sales cost advantages no such benefits were realized for relationships in which exchange partners relied heavily on the contract these findings are important because they suggest that by relaxing formal contractual mechanisms governing a relationship ntbfs can derive benefits from key customer relationships that are characterized by a high level of dependence our findings suggest that at high levels of exchange dependence on key customers ntbfs can benefit when greater contractual governance flexibility is present our data indicated that interestingly ntbfs tend to do just the opposite at higher levels of exchange dependence ntbfs are inclined to rely increasingly on the contract by so doing they may fail to realize the potential benefits of the relationships such as gaining access to complementary resources and reducing costs these outcomes which may be derived from dependent exchange relationships by means of contractual governance flexibility can have a significant influence on the long term development and competitive advantage of an entrepreneurial firm

the effect of adolescent experience on labor market outcomes the case of height taller workers receive a wage premium net of differences in family background the disparity is similar in magnitude to the race and gender gaps we exploit variation in an individual s height over time to explore how height affects wages controlling for teen height essentially eliminates the effect of adult height on wages for white men the teen height premium is not explained by differences in resources or endowments the teen height premium is partially mediated through participation in high school sports and clubs we estimate the monetary benefits of a medical treatment for children that increases height

beauty job tasks and wages a new conclusion about employer taste based discrimination using novel data from the berea panel study we show that the beauty wage premium for college graduates exists only in jobs where attractiveness is plausibly a productive characteristic a large pr

the role of alliances in the early development of high growth firms rapid growth is sought after but may overstretch a firm s resources can alliances supply compensating support for rapidly growing firms longitudinal data on firms in a technology cluster are used to investigate rapid growth in relation to alliances and other factors known to be associated with firm growth rapid firm growth appears beneficial in terms of higher survival rates and earlier attainment of mid size but is rarely sustained alliances are predictors of rapid growth as are international operations venture capital is not directly associated with firm growth in the findings but there is a high incidence of alliances among venture capital backed firms copyright 2014 the author 2013 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

size growth and survival in the upper austrian farm sector this paper investigates the evolution of the size distribution of more than 40 000 farms in the upper austrian farm sector over the period 1980 90 using gibrat s law as our point of departure we find that smaller farms grow much faster towards some minimum efficient scale of production than farms at or above this threshold size we furthermore find evidence for the existence of two separate centres of attraction of farm size supporting the notion of a disappearing middle and the emergence of a bimodal structure of farm sizes correcting for size related attrition bias had very little effect on our results

the high growth in new metal based manufacturing and business service firms in finland this study examined the effects of the factors involved in the start up situation and the first seven years development on the subsequent high growth of firms the criterion of success used in this study was high growth in business during the first seven years the subjects were finnish metal products manufacturing firms and business service firms established in 1990 the results indicated firstly that it is the internal networks of firms that bring about competitive advantage innovations and efficiency in these entrepreneurial team driven firms a group of people participate in the strategic management of the firm it was also found that co operation between firms and changes in external personal networks contributed to a high rate of growth the empirical results showed that new firms had equal chances for growth irrespective of their locality on the other hand growth was affected by changes in a new firm s competitive situation and by changes in strategic factors the results also clearly indicated that high growth firms were characterised by rising productivity of labour at the same time as they were generating new jobs

bringing income distribution in from the cold the title of this presidential address is chosen to highlight the way in which the subject of income distribution has in the past been marginalised for much of this century it has been very much out in the cold there are signs that in the 1990s it is being welcomed back and i shall be referring to recent research but i would like to use this occasion to give further impetus to the re incorporation of income distribution into the main body of economic analysis this abstract was borrowed from another version of this item

defending gibrat s law as a long run regularity according to gibrat s law of proportionate effect the growth rate of a given firm is independent of its size at the beginning of the period examined while earlier studies tended to confirm the law more recent research generally rejects it this article reconciles these two streams of literature taking into account the role of market selection and learning in reshaping a given population of firms through time consistently with previous studies we find that gibrat s law has to be rejected ex ante since smaller firms tend to grow faster than their larger counterparts however a significant convergence toward gibrat like behavior can be detected ex post this finding is an indication that market selection cleans the original population of firms so that the resulting industrial core does not depart from a gibrat like pattern of growth from a theoretical point of view this result is consistent with those models based on passive and active learning and can be seen as a defense of the validity of the law in the long run

networks and local environmental characteristics in the survival of new firms this study seeks firstly to clarify which networks at start up situation and early in life influence the survival of new firms secondly the study examines regional differences in the success of new firms the subjects were firms which had closed down during their fourth to sixth year of operations and they were compared with firms continuing in business the results indicate firstly that it is networks internal to firm that create competitive advantage innovation and efficiency secondly management based on working in groups was emphasized in the firms that continued in business in a typical family enterprise ownership management and family are united in a single entity in other types of firms networks are seen as participating in the strategic management of the firm thirdly close downs were often caused by uncontrolled risks a firm which fails after a successful start up often tends to grow rapidly in the beginning leaning on its product idea but this rate of growth is too high from the viewpoint of the financing and the management of the firm in firms which closed the growth objectives were too ambitions compared with the resources of the entrepreneur

job tasks time allocation and wages this paper studies wage determination using the first longitudinal data set containing job level task information for individual workers novel quantitative task measures detail the amount of time

employment and smes during crises the persistent increasing duration of unemployment has become an issue during economic crises although lay offs at large firms normally make headlines during crises we still know little about the potential impact of firm size on adjustment behavior in a crisis we studied effects of firm size on employment growth during economic slowdowns using a rich microeconomic database for the 1988 2007 period in portuguese manufacturing industry the results show that economic downturns affect firm growth negatively this negative effect is found to be higher for larger firms both during and immediately following crisis periods small and medium sized enterprises smes emerge as potential stabilizers in downturn periods however larger firms seem to be able to quickly recover from downturn periods our results contribute to the scarce literature and to the understanding of the portuguese case where many smes secure most jobs these first results may be useful because smes play a determinant role in other european union economies

entrepreneurship and growth the strategic use of external resources abstract a common characteristic of entrepreneurial farms is fast growth a common problem for their managers is obtaining enough resources to accommodate that growth a typical entrepreneur either individual or corporate often desires to pursue a detected opportunity but lacks the necessary resources to make it happen again gaining access to those resources becomes the first entrepreneurial problem one of the most efficient weapons used by entrepreneurial firms to gain market share from larger more powerful corporations is their flexibility but the progressive accumulation of resources that growth often entails brings almost necessarily a loss of that very flexibility that made the firm successful in the first place this can be termed the second entrepreneurial dilemma networking practices are a way to overcome these problems essentially networking is a system by which entrepreneurs can tap resources that are external to them i e that they don t control in its simplest form networking consists of the use of all personal relationships to obtain advice financing insider sales etc birley 1986 in its most sophisticated form entrepreneurs set up an elaborate web of relationships between companies most of them of similar entrepreneurial characteristics that are extremely efficient and flexible at delivering a product or service in all cases we find that the ability to exploit resources that are outside the entrepreneur s control is a constant of entrepreneurial high growth management this is why entrepreneurs have been defined as being primarily motivated by the pursuit of opportunities as opposed to those managers exclusively concerned with the proper management of the resources already controlled by their firm stevenson 1983 stevenson and gumpert 1985 this paper proposes a view whereby the essence of entrepreneurship is seen precisely in the ability and willingness to use external resources a statistical validation of the main hypothesis i e that entrepreneurial fast growing firms do use more external resources than their competitors is then attempted the results strongly support the hypothesis it is found that the fastest growing firms in a very large sample of public companies are much less integrated make more use of external resources than their competitors in addition those firms that are at the forefront of using external resources grow on average much faster more than 10 every year than their competitors over a long period of time ten years this study s implication for managers seems clear it constitutes yet another piece of evidence in favor of the efficiency of networking arrangements being flexible enough to use external resources allows the entrepreneurial firm to break through the limits to sustainable growth and at the same time lowers its risk for it taps into someone else s experience and know how entrepreneurs and entrepreneurial managers must not be deterred by the lack of resources in the pursuit of opportunities

the relationship between firm growth and labor demand several american studies have recently estimated models of employment growth from longitudinal data sets of business firms evans 1987 leonard 1986 hall 1987 by and large these studies find that the growth rate of employment is inversely correlated with initial size measured by employment and with age young firms tend to grow more rapidly than old ones these studies have cast considerable doubt on gibrat s law or the assumption of independence between firm size and the rate of growth however departures from gibrat s law are modest especially among firms above minimum size recently a group of researchers has proceeded along similar lines of investigation using data from a panel of italian manufacturing firms located in northern italy the purpose of this paper is to compare our results with those obtained for the u s and to explore in more detail the soundness of this approach our results are similar to the abovementioned american studies we find that departures from gibrat s law are not large

what are the drivers of business demography and employment in the countries of the european union the aim of this contribution is to establish a typology of european entrepreneurship countries with respect to variables related to entrepreneurial activity and economic development using a combin

quadratic engel curves and consumer demand this paper presents a model of consumer demand that is consistent with the observed expenditure patterns of individual consumers in a long time series of expenditure surveys and is also able to provide a detailed welfare analysis of shifts in relative prices a nonparametric analysis of consumer expenditure patterns suggests that engel curves require quadratic terms in the logarithm of expenditure while popular models of demand such as the translog or the almost ideal demand systems do allow flexible price responses within a theoretically coherent structure they have expenditure share engel curves that are linear in the logarithm of total expenditure we derive the complete class of integrable quadratic logarithmic expenditure share systems a specification from this class is estimated on a large pooled data set of u k households models that fail to account for engel curvature are found ro generate important distortions in the patterns of welfare losses associated with a tax increase

the effect of credit constraints on the college drop out decision a direct approach using a new panel study a serious difficulty in determining the importance of credit constraints in education arises because standard data sources do not provide a direct way of identifying which students are credit constrained this paper differentiates itself from previous work by taking a direct approach made possible by unique longitudinal data from the berea panel study the results from our study of berea college students suggest that while credit constraints likely play an important role in the drop out decisions of some students the large majority of attrition of students from low income families should be primarily attributed to reasons other than credit constraints jel i21 i22

retaining winners can policy boost high growth entrepreneurship abstract we analysed the growth impact delivered by a high growth entrepreneurship policy initiative over a six year period using an eight year panel that started two years before the initiative was launched and propensity score matching to control selection bias we found that the initiative had more than doubled the growth rates of treated firms the initiative had delivered a strong impact also on value for money basis in addition to producing the first robust evidence on the growth impact delivered by a high growth entrepreneurship initiative we contribute to public sponsorship theory with the notion of capacity boosting activities to complement previously discussed buffering and bridging activities

early employment expansion and long run survival examining employee turnover as a context factor abstract we investigate under which circumstances early employment growth translates into greater long run survival drawing on penrose s growth theory we suggest that the relationship between early employment growth and long run survival is conditional on employee turnover we argue that higher employee turnover reduces joint experience in the firm and disrupts the development and eventual exploitation of the firm s productive opportunity set thereby reducing long term utilization of early employment expansion these arguments suggest that the firm s ability to realize long term benefits of early employment growth is contingent upon low employee turnover following this initial expansion using the danish integrated database for labor market research we show that only when employee turnover is low will early employment growth lead to higher survival in the long run