System-Dependent Selection, Ecological Feedback, and the Emergence of Functional Structure in Ecosystems
The growth of young, technology-based firms has received considerable attention in the literature given their importance for the generation and creation of economic wealth. Taking a strategic management perspective, we link the entrepreneurial strategy deployed by young, technology-based firms with firm growth. In line with recent research, we consider both revenue and employment growth as they reflect different underlying value creation processes. Using a unique European dataset of research-based spin-offs, we find that firms emphasizing a product and hybrid strategy are positively associated with growth in revenues. The latter strategy also has a positive influence on the creation of additional employment. Contrary to expectation, however, we find that firms pursuing a technology strategy do not grow fast in employment. Our study sheds new light on the relationship between entrepreneurial strategy and firm growth in revenues and employment.