Do Experts Know What Growth is? Two Studies on Perception

One of us remembers sitting in a meeting at Stanford University in 2007 with a group of managing partners of a half dozen of Silicon Valley’s leading venture capitalist (VC) firms. The topic of the discussion was how VCs went about picking winners for the

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For further volumes: http://www.springer.com/series/8860

Malin Brännback • Alan L. Carsrud Niklas Kiviluoto

Understanding the Myth of High Growth Firms The Theory of the Greater Fool

2123

Malin Brännback School of Business and Economics Åbo Akademi University Åbo (Turku) Finland

Alan L. Carsrud School of Business and Economics Åbo Akademi University Åbo (Turku) Finland

and Stockholm University School of Business Stockholm Sweden Niklas Kiviluoto Palmu Evolution Oy Helsinki Finland

ISSN 2191-5482 ISSN 2191-5490 (electronic) ISBN 978-1-4614-9456-0 ISBN 978-1-4614-9457-7 (eBook) DOI 10.1007/978-1-4614-9457-7 Springer New York Heidelberg Dordrecht London Library of Congress Control Number: 2013951528 © The Author(s) 2014 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright Law of the Publisher’s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance Center. Violations are liable to prosecution under the respective Copyright Law. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made. The publisher makes no warranty, express or implied, with respect to the material contained herein. Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com)

Contents

1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

2

How Did Growth Become So Interesting? . . . . . . . . . . . . . . . . . . . . . . . . .

5

3

Entrepreneurship, Growth, and High-Growth in Research and Policy

21

4

Measuring Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43

5

Growth and Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .