Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81371
Authors: 
Henrekson, Magnus
Johansson, Dan
Year of Publication: 
2008
Series/Report no.: 
IFN Working Paper 757
Abstract: 
High-growth firms (HGFs) are critical for net job creation and economic growth. We analyze HGFs using the theory of competence blocs, linking firm growth to property rights and the interaction of complementary expertise. Specifically, we discuss how the institutional framework affects the prevalence and performance of HGFs. Firm growth is viewed as resulting from the perpetual discovery and use of productive knowledge. A key element in this process is the competence bloc, a nexus of economic actors with complementary competencies that are vital in order to generate and commercialize novel ideas. The institutional framework determines the incentives for these individuals to acquire and utilize knowledge. We identify a number of institutions that foster the emergence of competence blocs and the creation of HGFs. In particular, our analysis points to the pivotal roles played by tax structures, labor market regulation, and the contestability of currently closed service markets. Finally, we characterize institutions beneficial for sclerotic or dynamic capitalism, respectively, depending on whether they provide a favorable environment for the emergence of competence blocs and the creation of HGFs.
Subjects: 
Competence Bloc
Dynamic Capitalism
Entrepreneurship
Flyers
Gazelles
High-growth Firms
Industrial Policy
Innovation
Institutions
Labor Security
Product Market Regulations
Property Rights
Sclerotic Capitalism
Self-employment
Tax Policy
JEL: 
H32
L25
L50
M13
O31
P14
Document Type: 
Working Paper

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