Agglomeration, Clusters and Entrepreneurship
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Agglomeration, Clusters and Entrepreneurship

Studies in Regional Economic Development

Edited by Charlie Karlsson, Börje Johansson and Roger R. Stough

Regional economic development has experienced considerable dynamism over recent years. Perhaps the most notable cases were the rise of China and India to emergent country status by the turn of the millennium. With time now for hindsight, this book identifies some of the key forces behind these development successes, namely agglomeration, clusters and entrepreneurship.
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Chapter 8: Rapid-growth firms: exploring the role and location of entrepreneurial ventures

Jarle Bastesen and Eirik Vatne


In the struggle for long-run economic performance, governments try to find incentives and make priorities to enhance effectiveness, innovation and job creation (OECD, 2002; 2006a). Entrepreneurs, especially high-growth firms, are recognized as central actors in fostering employment opportunities, growth and innovation (Birch, 1987; Europe-Innova, 2006; OECD, 2002). Despite their importance in the economy, we have little systematic knowledge about them (Hvide, 2005). Organizational growth is not well understood, partly because of the heterogeneity of growth patterns at the firm level. Different theoretical contributions discuss whether organizational patterns of growth depend on the size of the firm, its age or industry; on the type of governance and its relationship to other economic agents; on its market potential in niche markets and locations; or on the ambitions of the entrepreneurs. We know that the study of growth is dependent on the measure used to identify firm growth, and that high-speed growth is not a sustainable position for most firms but an episode that usually happens once or twice in the lifespan of a firm. A special interest is ascribed to the study of rapid-growth firms. These firms have gained special attention because they must have done something better or different than others. Rapid growth is seen as an indicator of the firm's overall success (Fischer and Reuber, 2003). Normally these firms are young, rapidly expanding small and medium-sized enterprises (SMEs) and central drivers in generating new jobs and wealth.

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