Performance and Optimality for High Technology Firms: An empirical analysis of growth and innovation

Gavin C Reid, Vandana Ujjual

    Research output: Chapter in Book/Report/Conference proceedingChapter


    This paper examines performance empirically, in terms of growth, innovation and optimality, for firms active in the risky area of high technology enterprise. Econometric results are presented on Gibrat’s Law and the Schumpeterian Hypothesis. Gibratian estimates suggest a short-run equilibrium size of just 100 employees, but a medium term equilibrium size of about 1000 employees if innovation is to be optimised. Schumpeterian estimates suggest that firms must grow, in the long run, to much larger sizes - of beyond 3,000 employees - to achieve Schumpeterian benefits of potentially unlimited scale economies in R&D. We argue that the principal way to achieve this must be by takeovers and mergers. We illustrate this with two brief company case studies.
    Original languageEnglish
    Title of host publicationEntrepreneurship
    Subtitle of host publicationMotivation, Performance and Risk
    EditorsRichard Fairchild
    Place of PublicationHauppauge, NY, USA,
    PublisherNova Publishers
    VolumeChapter 3
    ISBN (Print)978-1-61470-148-4
    Publication statusPublished - Dec 2013


    • High technology, Scottish firms, Gibrat’s Law, the Schumpeterian Hypothesis


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