A Configurational Momentum Perspective on Exceptional Growth and Power-Law Distributions

How certain firms achieve exceptional growth compared to their counterparts is a central question in current management and strategy research. To address this, we investigate the theoretical mechanisms driving outlier growth patterns using a single-case embedded study in the context of the highly volatile Chinese real estate industry over the past two decades. We develop a novel theoretical lens, the configurational momentum perspective, regarding firms’ exceptional growth to explore momentum-driven power-law distributions in the industry. We propose that outlier firms are more likely to (a) establish efficiency-centric configurations during the early stages of industry emergence, (b) generate positive feedback loops between internal and external sources of financing, and (c) sustain greater operational efficiency through configurational momentum as the industry evolves. This study links cost-driven efficiency to outlier performance and provides practical implications for understanding how configurational momentum drives organizational scaling and the emergence of power-law distributions within industries.