Narrow Results

This study uses a representative sample of Korean manufacturing firms for the period 2010–2018 to examine the relationship between firm size and growth in various aspects. The main findings are as follows. First, smaller firms have a higher average growth rate and wider growth dispersion (growth variance) across the firms. Second, the growth rates of micro and small firms show negative growth persistence resulting in a volatile growth pattern. In contrast, medium and large firms have a high probability that the growth rates persist over time, indicating a stable growth pattern. Third, the first and second findings are robustly observed regardless of the disaggregated sectors in the manufacturing industry, which are divided based on their technological-intensity levels. The findings imply that (a) it is necessary to analyze and understand differences in growth patterns by firm size and (b) firm growth requires policies tailored to the size of firms.

This paper examines the causal effect of credit access on firm growth (measured by employment growth), using a unique micro-, small-, and medium-sized firm-level data collected every two years in Vietnam from 2005 to 2013. The results obtained from fixed-effects (FE) and FE with instrumental variable estimators show that firms with credit access experience a higher growth than firms without credit access. We also find that access to credit is positively associated with both formal and informal firm growth, but the results for formal firms seem to be driven by some high growth firms (and rapidly shrinking firms). The effect of credit access on firm growth is also heterogeneous by firm size and firm age in both types of firms.

Social capital and access to finance have been identified as key resources that influence the growth of small firms however, these variables have rarely been studied. This paper, therefore, examines the relationship between social capital and firm growth with access to finance as a moderating role. 250 small firms in the Kumasi Metropolis in Ghana were used for the study. Structural Equation Modelling using Partial Least Square (PLS) was used to analyze the data collected using area sampling. The results indicated that social capital does not directly influence firm growth. In addition, access to finance does not moderate the relationship between social capital and firm growth. However, a positive relationship was found between social capital and access to finance. Access to finance and firm growth, though significant, had a negative relationship. It is recommended that since social capital influences the capability to access finance, entrepreneurs should be encouraged to build more relationships within their networks. Moreover, government agencies and financial institutions should devise strategies that will reduce the interest rates so that though these small firms in Ghana can access finance, the high interest rates will not erode the gains they may achieve in the long run.

This study combines the concept of trigger points, events preceding bursts of growth, with a linguistic approach to show how firm growth unfolds through a process of translation. By marrying theories and methods rooted in the linguistic turn with firm growth theories, this study brings new insights on growth contributing to both the advancement of the trigger point concept and the wider understanding of entrepreneurial activities as complex and contextually bound processes dependent on human interaction. In doing so, the study also adheres to the current demand for advancing firm growth theory by relaxing the outcome-focussed approach and static life-cycle paradigm, and complementing it with alternative theoretical and methodological perspectives.

This study examines the effect of digital capability on firm performance and firm growth. We apply the resource-based view and especially its expansion of the dynamic capabilities perspective to illustrate how digital capability is positively related to firm performance and firm growth, and how firm size is a relevant factor in explaining digital capability in incumbent SMEs. The context of this study is Finnish SMEs. The data were gathered from 242 SME owner-managers and analysed with structural equation modelling. The results show that smaller firms have less digital capability than larger SMEs and that smaller firms struggle with performance indicators. Digital capability is positively related to firm performance and firm growth. Our results indicate that although several factors explain and alter the course of firm growth, digital capability can boost the opportunity creation process, and aid survival in the face of competition. Digital capability is an important resource in SMEs and allows firms to safeguard the sustainability of their business model. We argue that digital capability is strongly related to SME’s management practices and SME owner/manager’s commitment to responding to digital transformation. This research sheds light on the importance of strategic leaders’ perceptions of digital capability on incumbent SMEs’ competitive advantage, and contributes both entrepreneurship theory and practice.

The purpose of this paper is to examine the determinants of Taiwan's manufacturing firm growth, in particular, the effects of financial structure, corporate financing choices and Taiwanese outward FDI in China on firm growth in different industries besides other physical factors discussed in the literature. We construct an unbalanced dynamic panel data using 280 listed and OTC manufacturing firms over the period 1991–2002. The empirical method utilized is the generalized method of moments (GMM) proposed by Arellano and Bond (1991). Our results find that (1) the growth rates of firms are positively related to firm size, age, capital intensity, lagged R&D, export ratio, investment ratio, and profits; (2) high debt-to-equity ratio is associated with low corporation growth, while high return on total assets is associated with high corporation growth, which reflects that a firm with a relatively sound financial structure will facilitate their growth; (3) higher liquidity of stock market relative to the banking sector lead to higher growth of firms. However, larger size of stock market relative to the banking sector leads to lower the firm's growth, i.e., the smaller the indirect finance, the lower the firm growth; (4) firms engaged in FDI toward China might be hollowing-out; (5) individual firms that could be financed more from either bank or equity market will enjoy higher rates of growth compared to others in the same industries, but, those effects on traditional and basic industries are weaker; (6) high bank-financing ratio and internal financing are associated with higher firm growth, while firms using more bonds or equity financing tend to experience lower growth. However, the net positive effects of equity financing on traditional and basic firm growth are significantly greater.

We determine the distribution of size and growth rates of German business firms in 1987–1997. We find a log-normal size distribution. The distribution of growth rates has fat tails. It can be fitted to an exponential in a narrow central region and is dominated by finite-sample-size effects far in its wings. We study the dependence of the growth rate distribution on firm size: depending on procedures, we find almost no dependence when the center of the distribution is considered or, similar to previous work, a power-law when the wings are weighted more strongly. Correlations in the growth of different firms are essentially random. We determine the annual growth of the entire economy, and successfully correlate it with a standard economic indicator of business cycles in Germany. We emphasize possible problems related to the finite number of firms comprised in our database and its short extension in time.

The purpose of the paper is to investigate technical knowledge-seeking activities in young and growing technology-based firms. Changes in technical knowledge-seeking activities were traced using a single illustrative case study of a young and growing technology-based firm. The results of the study show how strong commitment to the business concept of the emerging firm affected the direction of technical knowledge-seeking in a way that increases the vulnerability of the firm. New employees who were not as familiar with or committed to the original business concept brought with them different incentives for knowledge-seeking, which lead to search in new directions. These knowledge-seeking activities were important for the renewal of the firm's knowledge base. It is therefore suggested that differences in individual incentives may affect the direction of technical knowledge-seeking activities, and correspondingly, that multiple incentives are an important source of diversity in technical knowledge creation.

This paper probes the factors which determine or enable SMEs to acquire external support, to achieve technological innovation outputs (in the form of innovation sales) and to enhance economic performance (in the form of sales growth). At the outset a conceptual framework (based on literature survey) is formulated by identifying the key variables relevant to the research objectives. Subsequently based on primary data gathered from 157 innovative SMEs covering auto components, electronics and machine tool industries in the Bangalore city region of India, we analyzed the three objectives. By means of logistic regression analysis, we ascertained that SMEs which have internal technical competence in the form of technically qualified owner/manager and an exclusive design office, which innovate frequently, particularly focusing on both product and process innovations obtained external support relative to the rest. Backward elimination multiple regression analysis revealed that firms which are able to obtain and complement external support to their internal technical competence, and which are "entrepreneurial firms" achieved more innovation sales. Finally, backward elimination multiple regression analysis ascertained that innovation sales, objective of firm origin, age of firms and nature of innovations significantly influenced the sales growth of SMEs.

Upper echelon theory and research on innovation have considered top management teams and their behaviour and characteristics as important factors that positively influence innovativeness and organizational outcomes. Yet, innovation research has mostly focused on individual new product projects, and their performance and impact on firm performance. Recent research has started to apply a more holistic view in terms of innovation, by considering firm-wide innovation instead of single new products. Upper echelon research has concentrated on direct relationships between top management team characteristics and organizational outcomes. But recent research calls for mediating effects of the relationship between top management team characteristics and organizational outcomes. Hence, this study introduces firm innovativeness as a mediator between top management team innovation orientation and firm growth. Focusing on small and medium-sized firms, which often represent highly innovative firms, results show that firm innovativeness fully mediates the relationship between top management team innovation orientation and firm growth. Implications and future research are discussed.

There has been a lot of interest in R&D dynamics, including the persistency and volatility of R&D investment. However, there is a lack of empirical evidence supporting the impact of R&D dynamics on firm growth in the context of an economic crisis. This study examines the effects of R&D dynamics on firm growth during and after the global financial crisis of 2008–2009. Based on firm-level data, we construct a balanced panel for 1,137 firms in the global petrochemical industry. Our findings indicate that firms with R&D persistency show higher growth during and after the crisis, regardless of firm size. R&D persistency has a higher impact on firm growth in large firms than in smaller ones. In addition, R&D persistency has greater influence than the level of R&D investment. Firms should pursue non-cyclical and consistent R&D strategies with a long-term perspective, especially in high uncertainty conditions.

This study examines the extent to which the intra-industry knowledge spillover and a firm’s alliance portfolio diversity have an effect on product innovation performance and the growth of different size of firms. A model was proposed and empirically tested using structural equation modelling with Bayesian estimation. The data was extracted from the Colombian innovation survey EDIT from 2011 to 2016 and comprised a sample of 913 manufacturing firms. The results demonstrated that less-developed and resource-scarce settings, such as Colombia, foster interfirm collaboration regardless of their size. Nevertheless, even when considered the positive and significant effect of collaboration, spillovers are the most relevant external knowledge source in explaining the product innovation performance and growth of small and medium firms. The findings also showed that knowledge spillovers can be detrimental to the large firms’ outcomes, possibly associated with a weaker appropriability regime and the loss of knowledge derived from outgoing spillovers.

This paper studies the role of technological and commercialisation capabilities within scale-ups. Scale-ups are firms which manage to achieve an annual growth rate of at least 20% over a period of at least three years and with at least 10 employees in the beginning of the period. Based on evidence from IPR literature, we use patent filings to signal capabilities related to technological innovation and trademark filings to signal the downstream capabilities connected with the commercialisation of new products and services. By comparing the IPR flings of the top 250 scale-ups with other scale-ups and non-scale-up firms, this paper provides evidence that commercialisation capabilities contribute more to the growth of these firms than technological capabilities. Scale-ups tend to file trademarks already at a young age indicating that these capabilities are already present when these firms start off whereas patents are filed later on.

Computer and information technology is considered one of the most powerful engines of modern growth, but more empirical evidence is needed to quantify its impacts. This paper studies the role of computer and information technology in industrial restructuring by observing structural change in the manufacturing sector in the People's Republic of China using a large firm-level data set. Computer and information technology is found to boost changes in industrial structure substantially. This paper also identifies faster and higher-quality growth of firms as the underlying channel through which computer use can improve industrial structure. Firms using computers grow faster, spend more on research and development, and enjoy greater productivity.

Upper echelon theory and research on innovation have considered top management teams and their behaviour and characteristics as important factors that positively influence innovativeness and organizational outcomes. Yet, innovation research has mostly focused on individual new product projects, and their performance and impact on firm performance. Recent research has started to apply a more holistic view in terms of innovation, by considering firm-wide innovation instead of single new products. Upper echelon research has concentrated on direct relationships between top management team characteristics and organizational outcomes. But recent research calls for mediating effects of the relationship between top management team characteristics and organizational outcomes. Hence, this study introduces firm innovativeness as a mediator between top management team innovation orientation and firm growth. Focusing on small and medium-sized firms, which often represent highly innovative firms, results show that firm innovativeness fully mediates the relationship between top management team innovation orientation and firm growth. Implications and future research are discussed.

We determine the distribution of size and growth rates of German business firms in 1987–1997. We find a log-normal size distribution. The distribution of growth rates has fat tails. It can be fitted to an exponential in a narrow central region and is dominated by finite-sample-size effects far in its wings. We study the dependence of the growth rate distribution on firm size: depending on procedures, we find almost no dependence when the center of the distribution is considered or, similar to previous work, a power-law when the wings are weighted more strongly. Correlations in the growth of different firms are essentially random. We determine the annual growth of the entire economy, and successfully correlate it with a standard economic indicator of business cycles in Germany. We emphasize possible problems related to the finite number of firms comprised in our database and its short extension in time.