Description

Competencies and Institutions Fostering High-Growth Firms examines high-growth firms, also known as "Gazelles", which have become critical to net job creation and economic growth. It analyzes how the institutional framework - the "rules of the game" -- affects such firms, taking the theory of competence blocs as a point of departure. The three institutional categories that are key areas for the promotion of high growth firms include the tax system, the organization of labor markets and product market regulations. The authors characterize institutions as either fostering dynamic capitalism, by providing a favorable environment for the emergence of competence blocs and the generation of high growth firms or leading to "sclerotic capitalism" by failing to produce such an environment. By analyzing high growth firms through the lens of the theory of competence blocs, Competencies and Institutions Fostering High-Growth Firms offers a more holistic view of economic growth. Rapid firm growth is a complex process requiring a number of complementary competencies. This analysis suggests that the commercialization of innovations and generation of high growth firms would be greatly facilitated if more product markets are contestable and tax structures and labor market institutions are adjusted to stimulate the emergence of more effective competence blocs.