New Firm Growth: Exploring Processes and Paths

23 Pages Posted: 11 Mar 2004

See all articles by Elizabeth W. Garnsey

Elizabeth W. Garnsey

University of Cambridge - Judge Business School

Erik Stam

Utrecht University - School of Economics; Utrecht University - Tjalling C. Koopmans Research Institute

Paul Heffernan

University of Cambridge - Centre for Technology Management

Oliver Hugo

University of Cambridge - Centre for Technology Management

Date Written: January 2003 1,

Abstract

This paper provides a new methodology for the diachronic study of new firm growth, theoretically grounded in the work of Penrose (1995). We show that a model of firm growth as an unfolding process makes possible draw simple, measurable inferences from firm level to aggregate evidence on growth paths of new firms, expressed as propositions. Metrics on growth paths of new firms in three longitudinal samples of new firms are examined for evidence at the aggregate level consistent with the dynamic model. Dynamic processes in the early development of young firms result in variations in the timing, magnitude, duration and rate of change of growth as between firms and in the same firm over time. The conceptual and methodological framework in this paper provides a basis for future research aimed at explaining the development of new firms.

Keywords: entrepreneurship, new firm growth, Penrose, resource-based perspective, growth paths

JEL Classification: M, M10, L2, M13

Suggested Citation

Garnsey, Elizabeth W. and Stam, Erik and Heffernan, Paul and Hugo, Oliver, New Firm Growth: Exploring Processes and Paths (January 2003 1,). ERIM Report Series Reference No. ERS-2003-096-ORG, Available at SSRN: https://ssrn.com/abstract=496706

Elizabeth W. Garnsey

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+44 (0) 1223 338183 (Phone)

HOME PAGE: http://www.jims.cam.ac.uk/people/faculty/garnseye.html

Erik Stam (Contact Author)

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, +31 30 253 7373 3584 EC
Netherlands

Utrecht University - Tjalling C. Koopmans Research Institute ( email )

Adam Smith Building
Kriekenpitplein 21-22
Utrecht, 3584 EC
Netherlands

Paul Heffernan

University of Cambridge - Centre for Technology Management ( email )

Engineering Department
Trumpington Street
Cambridge, CB2 1PZ
United Kingdom
+44 (0)1223 338175 (Phone)
+44 (0)1223 766400 (Fax)

Oliver Hugo

University of Cambridge - Centre for Technology Management ( email )

Engineering Department
Trumpington Street
Cambridge, CB2 1PZ
United Kingdom

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