Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 757: Competencies and Institutions Fostering High-growth Firms

Magnus Henrekson () and Dan Johansson ()
Additional contact information
Magnus Henrekson: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Dan Johansson: Ratio, Postal: P.O. Box 3203, SE-103 64 Stockholm, Sweden

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.

Keywords: 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-codes: H32; L25; L50; M13; O31; P14

60 pages, June 24, 2008

Full text files

wp757.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Elisabeth Gustafsson ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:34:35.