Analysis of Enterprise Growth and Entrepreneurial Activities - Also Discussing the Path Dependence of Enterprise Growth and Its Transcendence - Library of Young and Middle-aged Economists

Author: Wang Liangjun
Publisher:
Publish Date: 2006-05-01
Features: For China, in the past 20 years, perhaps new enterprises have made greater contributions. However, in the long run, if new enterprises cannot grow significantly in the future, the development speed of the Chinese economy will undoubtedly slow down. How big can Chinese enterprises grow? This issue not only has profound microeconomic implications but also holds significant macroeconomic importance. In observing the reality of enterprise growth, we find that enterprise growth exhibits clear path dependency characteristics. Path dependency during growth is beneficial to enterprises in a stable environment, but when the market environment changes, it restricts enterprise growth. Therefore, overcoming path dependency in enterprise growth becomes a necessary condition for further development. This book explains the path dependency of enterprise growth from different perspectives such as psychology, economics, and management. The book argues that path dependency in behavior arises because decision-makers, when faced with uncertain future returns and substantial sunk investments alongside certain returns, tend to follow conventions or engage in marginal search in resource allocation. This can be explained psychologically by "loss aversion" theory and cognitive theory, analyzed economically by game theory, and explained in management by theories such as knowledge and capabilities.