Title: Assessing the role of strategy and socioeconomic heritage for rapidly growing firms: evidence from Germany

Authors: Michael Wyrwich

Addresses: Department of Economics, Friedrich Schiller University, Carl-Zeiss-Strasse 3, Jena, 07743, Germany

Abstract: The present paper sheds light on how growth of young firms is affected by expansive strategies and the socioeconomic heritage of their main actors. |Socioeconomic heritage| has to do with socialisation, prior socioeconomic circumstances and regional growth conditions; the term is elaborated upon and further defined in this study. The empirical analysis is carried out both for West Germany – a mature market economy – and for East Germany, which operated under a centrally planned economy until German reunification in 1990. The main finding of the paper is that the involvement of West Germans in East German start-ups has a favourable effect on these firm|s chances of growing rapidly. This effect is attributed to the fact that West Germans are more likely to possess person-related and situation-related factors necessary for growing a business in a market economy. The results are more ambiguous as to the influence of expansive strategies on fast growth.

Keywords: entrepreneurship; rapid firm growth; strategy; management; socioeconomic heritage; West Germany; East Germany; young firms.

DOI: 10.1504/IJEV.2010.030976

International Journal of Entrepreneurial Venturing, 2010 Vol.1 No.3, pp.245 - 263

Published online: 15 Jan 2010 *

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