What Makes Firms Grow in Developing Countries? An Extension of the Resource-Based Theory of Firm Growth and Empirical Analysis
This paper examines what makes firms grow using the investment climate survey that was conducted by the World Bank in eight developing countries. We rely on the resource-based theory of the firm that was proposed by Penrose (1959) where firm growth depends on the kinds and amount of the diverse reso...
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| Format: | Journal Article |
| Language: | EN |
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2012
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| Online Access: | http://hdl.handle.net/10986/4675 |
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okr-10986-46752021-04-23T14:02:19Z What Makes Firms Grow in Developing Countries? An Extension of the Resource-Based Theory of Firm Growth and Empirical Analysis Lee, Keun Temesgen, Tilahun Firm Behavior: Theory D210 Multinational Firms International Business F230 Mergers Acquisitions Restructuring Voting Proxy Contests Corporate Governance G340 Firm Performance: Size, Diversification, and Scope L250 Public Enterprises Public-Private Enterprises L320 This paper examines what makes firms grow using the investment climate survey that was conducted by the World Bank in eight developing countries. We rely on the resource-based theory of the firm that was proposed by Penrose (1959) where firm growth depends on the kinds and amount of the diverse resources a firm has. The paper extends Penrose's original idea to accommodate diverse options for firm growth and finds the following. First, in low-growth (capability) firms, growth is contributed by basic resources such as physical capital and human capital, whereas in high-growth firms, by higher-level resources such as managerial capital and research and development (R&D) capital. Second, the difference between low- versus high-growth firms has more to with the effectiveness of the relevant resources and less with the difference in the amount of resources. Third, export orientation and conglomeration are the most important strategies for firm growth, compared to networking with other local, state-owned enterprises (SOEs) or foreign firms. 2012-03-30T07:29:11Z 2012-03-30T07:29:11Z 2009 Journal Article International Journal of Technological Learning, Innovation and Development 17531942 http://hdl.handle.net/10986/4675 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
EN |
| topic |
Firm Behavior: Theory D210 Multinational Firms International Business F230 Mergers Acquisitions Restructuring Voting Proxy Contests Corporate Governance G340 Firm Performance: Size, Diversification, and Scope L250 Public Enterprises Public-Private Enterprises L320 |
| spellingShingle |
Firm Behavior: Theory D210 Multinational Firms International Business F230 Mergers Acquisitions Restructuring Voting Proxy Contests Corporate Governance G340 Firm Performance: Size, Diversification, and Scope L250 Public Enterprises Public-Private Enterprises L320 Lee, Keun Temesgen, Tilahun What Makes Firms Grow in Developing Countries? An Extension of the Resource-Based Theory of Firm Growth and Empirical Analysis |
| relation |
http://creativecommons.org/licenses/by-nc-nd/3.0/igo |
| description |
This paper examines what makes firms grow using the investment climate survey that was conducted by the World Bank in eight developing countries. We rely on the resource-based theory of the firm that was proposed by Penrose (1959) where firm growth depends on the kinds and amount of the diverse resources a firm has. The paper extends Penrose's original idea to accommodate diverse options for firm growth and finds the following. First, in low-growth (capability) firms, growth is contributed by basic resources such as physical capital and human capital, whereas in high-growth firms, by higher-level resources such as managerial capital and research and development (R&D) capital. Second, the difference between low- versus high-growth firms has more to with the effectiveness of the relevant resources and less with the difference in the amount of resources. Third, export orientation and conglomeration are the most important strategies for firm growth, compared to networking with other local, state-owned enterprises (SOEs) or foreign firms. |
| format |
Journal Article |
| author |
Lee, Keun Temesgen, Tilahun |
| author_facet |
Lee, Keun Temesgen, Tilahun |
| author_sort |
Lee, Keun |
| title |
What Makes Firms Grow in Developing Countries? An Extension of the Resource-Based Theory of Firm Growth and Empirical Analysis |
| title_short |
What Makes Firms Grow in Developing Countries? An Extension of the Resource-Based Theory of Firm Growth and Empirical Analysis |
| title_full |
What Makes Firms Grow in Developing Countries? An Extension of the Resource-Based Theory of Firm Growth and Empirical Analysis |
| title_fullStr |
What Makes Firms Grow in Developing Countries? An Extension of the Resource-Based Theory of Firm Growth and Empirical Analysis |
| title_full_unstemmed |
What Makes Firms Grow in Developing Countries? An Extension of the Resource-Based Theory of Firm Growth and Empirical Analysis |
| title_sort |
what makes firms grow in developing countries? an extension of the resource-based theory of firm growth and empirical analysis |
| publishDate |
2012 |
| url |
http://hdl.handle.net/10986/4675 |
| _version_ |
1764392352922730496 |