Firm growth in the Swedish retail and wholesale industries

To identify the determinants of firm growth in the Swedish retail and wholesale industries during 2000–2004, we analyse a sample of 400 limited liability companies using quantile regression techniques. Firm growth was mainly found to depend upon time-invariant firm-specific effects, supporting Penrose's [1959 Penrose, E. 1959. The theory of the growth of the firm, 4, New York: Oxford University Press.  [Google Scholar]. The theory of the growth of the firm (4th ed.). New York: Oxford University Press] suggestion that internal resources such as firm culture, brand loyalty, entrepreneurial skills, and so on are important determinants of firm growth.     

企业成长过程中的社会责任认知与行动战略

文章从利益相关者角度出发,以一个动态的视角来考察企业成长与企业社会责任之间的关系。通过对319份有效问卷的实证分析,文章基本证实了不同规模的企业、处在不同生命周期阶段的企业对社会责任的认知是存有差异的,企业在不断成长的过程中会采用不同的行动战略来承担社会责任。强求所有的企业都承担等量的社会责任,不仅不利于企业的持续成长,相反还会阻碍企业在承担社会责任方面采取实际行动。     

The Impact of Cross-Channel Integration on Retailers’ Sales Growth

The authors propose a conceptual framework to explain whether and under what firm-level conditions cross-channel integration impacts firm sales growth. To test the theory, the authors conduct a qualitative grounded-theory study to build a measurement tool for cross-channel integration at four levels and analyze longitudinal data on 71 publicly traded U.S. retail firms from 2008 to 2011, gathered from multiple secondary sources. The findings reveal that cross-channel integration stimulates sales growth, but that firm online experience and physical-store presence weaken this effect.     

企业成长阶段及其划分标准:一个评论性回顾

企业成长阶段理论已有近半个世纪的发展历程,但关于成长阶段划分标准及阶段数目直到今天都还处于无休无止的争论之中。探讨相关文献中有关成长阶段理论的起源、各种划分标准及相应阶段数目做了一个评论性回顾,指出了各种标准的优点和缺点,以及今后应该解决的问题。     

US affiliates,infrastructure and growth: A simultaneous investigation of critical mass

A structural model of a small open economy is developed that demonstrates how the impacts of infrastructure on GDP, factor productivity, and multinational industrial location can be decomposed into direct and indirect general equilibrium effects. The model is then estimated on a panel of 28 countries and it is found that schools and telecommunications have a positive and significant direct effect on domestic growth and that there are greater marginal returns for countries with higher investment levels; a result that is suggestive of a critical mass story. However, once spurious correlation of firm location and the indirect effects through wages and multinational activity are accounted for, the total effects of telecommunications and schools on growth are found to be higher than direct estimates would suggest. The results reveal important implications for understanding the channels through which infrastructure influences growth.     

A comparison of revenue growth at recent-IPO and established firms: The influence of SG&A, R&D and COGS

A dynamic view of the resource based theory (RBT) examines how a firm builds its resources over time, considering variations in resources' growth rates while the firm attempts to grow. Accordingly, we consider the elasticity of accumulated resources to assess conditions where these resources might serve as substitutes for rather than complements to COGS during periods of growth. We specify a production function that links aggregate resource allocation among SG&A, R&D and COGS expenses to a firm's revenue. This function yields a set of hypotheses on the elasticity of SG&A and R&D, and the productivity of COGS, while controlling for the revenue growth rate. We test these hypotheses on a dataset of 64 randomly selected firms that recently underwent an IPO, and a comparable set of 64 established public firms from four high-technology sectors. Results show that the accumulated stocks of resources can serve as substitutes for rather than complements to COGS, and the manner in which recent-IPO firms allocate and use resources differs from their established counterparts. We discuss the implications of associated elasticity and productivity results.     

The Diana Project: pioneering women studying pioneering women

The 2007 winner of the International Award for Entrepreneurship and Small Business Research is the Diana Project team (Candida Brush, Nancy Carter, Elizabeth Gatewood, Patricia Greene and Myra Hart). The Diana Project builds on the vast experience of the team in the field of entrepreneurship in general and women entrepreneurship, business growth and venture capital in particular. The Diana Project has investigated the supply and demand side of growth capital for women entrepreneurs. The research contributes to entrepreneurship theory as well as to practice, filling a void in knowledge on growth-oriented women entrepreneurship. In this article we present and discuss the research contribution of the Diana Project, in the areas of entrepreneurship, women entrepreneurship and venture capital. We specifically discuss the value of researching a specific group of women entrepreneurs, those who want to grow their businesses, that very clearly demonstrates the positive potential of female entrepreneurship. The Diana Project has also moved research on women’s entrepreneurship forward since its framework does not treat women entrepreneurs as “other,” i.e., the project does not presuppose that women’s entrepreneurship is similar to or different from men’s entrepreneurship. It assumes that women’s entrepreneurship is entrepreneurship and studies it from that point of view. Carin Holmquist is professor at Stockholm School of Economics and member of the Prize Committee for The International Award for Entrepreneurship and Small Business Research. Sara Carter is professor at University of Strathclyde. Both have written extensively in several of the areas covered by the Diana Project. The prize is awarded by the Swedish Foundation for Small Business Research (FSF) and the Swedish Board of Industrial and Technical Development (NUTEK). An important aim with this prize is to attract broader attention to this research field. A precondition for choosing the winner of the award is that the research for which the award has been granted is a significant contribution to the theory and empirical understanding of entrepreneurship and the importance of entrepreneurship, new firm formation and small businesses in economic development. Besides the honor, the prize consists of SEK 0.5 million (roughly USD 80,000). It has been awarded annually since 1996. More information about the prize and previous winners is available at .     

Pathways to entrepreneurial growth: The influence of management, marketing, and money

Business growth is considered a worthy goal for firms and a measure of entrepreneurial success, as well as important for economic development. Why some firms grow and others do not, though, remains a subject of debate. Of the small proportion of firms that do grow, it is often assumed that they follow a similar growth trajectory and/or encounter certain stage thresholds; however, the evidence base on this is wanting. The new study of business growth presented here provides an in-depth analysis of 19 New England-based firms. Our findings reveal that fast-growing companies exhibit different rates and patterns of growth: some display rapid growth trajectories (Rapid Growth Pattern); some, slower, more measured rates (Incremental Growth Pattern); others, episodic periods of quick growth followed by sharp retrenchment (Episodic Growth Pattern); and, while no firm actively chose to stop growing, some reached points of stagnation (Plateau Growth Pattern). We found that three key factors—management, marketing, and money—affected company growth across these patterns. While not every factor was critical at each moment of growth for each firm, every entrepreneur cited the relative importance of each factor at some time during the growth of their firm. Thus, fast-growing firms do not grow in the same manner, at the same rate, or with the same outcomes. This article has implications for those seeking to understand the processes of development and patterns of fast-growth businesses.     

Entrepreneurship,Innovation and Economic Growth: Evidence from GEM data

Studies on the impact of technological innovation on growth have been largely mute on the role ofnew firm formation. Using cross-sectional data on the 37 countries participating in GEM 2002, this paper uses an augmented Cobb–Douglas production to explore firm formation and technological innovation as separate determinants of growth. One area of interest is the contrast between different types of entrepreneurial activities as measured using GEM Total Entrepreneurial Activity (TEA) rates – high growth potential TEA, necessity TEA, opportunity TEA and overall TEA. Of the four types of entrepreneurship, only high growth potential entrepreneurship is found to have a significant impact on economic growth. This finding is consistent with extant findings in the literature that it is fast growing new firms, not new firms in general, that accounted for most of the new job creation by small and medium enterprises in advanced countries.     

Invariances and Diversities in the Patterns of Industrial Evolution: Some Evidence from Italian Manufacturing Industries

This work explores and compares some basic properties of corporate growth process at both aggregate manufacturing level and disaggregated sectoral levels. Using an extensive dataset on Italian manufacturing firms, we investigate which properties of firm growth dynamics are robust under disaggregation. We compare the results obtained with three different definitions of firm size, namely total sales, number of employees and value added. Our analysis suggests that while different sectors are characterized by significant differences in firm size distributions, in the degrees of concentration and in the autoregressive structure of the growth processes, there are also regularities which hold across all of them, such as the approximate unit root nature of the growth process and the power exponential shape of the growth rates density. Together, these “stylized facts” suggest challenging puzzles on the drivers of corporate growth and the resulting industrial structures.     

Knowledge networking and growth in service firms

This paper empirically assesses whether knowledge networking affects the growth of small service firms. More specifically, using a large, unbalanced panel data set for the period 1992–2009, it investigates whether participation in a knowledge network called PLATO is positively related to service firm growth. The results show that knowledge networking has a highly significant positive effect on the net asset and added value growth of service firms. Furthermore, it is demonstrated that the positive effect of knowledge networking on firm growth is significantly larger for service firms than for manufacturing firms, indicating that industry drives networking success.     

Does Gibrat’s Law Hold? Evidence from Canadian Retail and Manufacturing Firms

This paper investigates the validity of Gibrat’s Law holding for firms in manufacturing and retail trade sectors. The object is to expand our knowledge of Gibrat’s Law to include non-manufacturing firms. A unique longitudinal firm-level database, which contains information on Canadian incorporated establishments, enables the inter-industry comparison. The findings of the analysis are that Gibrat’s Law is violated in both manufacturing and retail sectors. Violations of Gibrat’s Law for both sectors include (i) growth rates that depend on firm size (ii) growth variability that depends on firm size and (iii) a negative persistence of firm growth. Finally, age effects or selection effects are not the causes of these violations.      

Factor Substitution, Average Firm Size and Economic Growth

This paper extends the Lucas (1978, The Bell Journal of Economics 9(2), 508–523) analysis of firm size by taking into account a normalised aggregate CES production function. In a general equilibrium framework it is proved that there is an inverse relation between the elasticity of substitution and average firm size. If interpreted together with the fact that richer countries are characterised by a higher elasticity of substitution, this result can explain why the recent literature finds a positive association between the importance of SMEs in an economy and its stage of development, but seems to fail in finding causality between the two. Both have a common origin: a high value of the elasticity of substitution. This paper also provides a first empirical test of the theory proposed using cross-country data from both developed and developing countries.     

The effect of credit on growth and convergence of firm size in Kenyan manufacturing

Few studies test for the effect of credit and convergence on firm growth in the context of a developing economy. The use of bank credit can affect firm growth in two opposite ways. The effect may be positive if credit allows a firm to address its liquidity constraint and increase investment and profitability. However, if macroeconomic shocks such as unexpected increases in interest rates make firm debts unsustainable, as experienced in Kenya in the 1990s, indebted firms may shrink or even collapse. Using microeconomic data on the Kenyan manufacturing sector, this study finds that conditional on survival, the firms that use credit grow faster than those not using it. There is also evidence that small firms grow faster than large ones, confirming the convergence hypothesis. These results are robust to alternative estimation procedures controlling for both endogeneity and selection bias.     

A meta-analysis of the determinants of organic sales growth

We present the results of a meta-analysis on drivers of organic sales growth conducted using a Hierarchical Bayes estimation technique. Based on a comprehensive review of a diverse set of literatures on organic sales growth, we identify eleven drivers of organic sales growth performance of firms: (i) innovation, (ii) marketing orientation (iii) advertising (iv) interorganizational networks, (v) entrepreneurial orientation, (vi) management capacity, (vii) firm age, (viii) firm size, (ix) competition, (x) munificence, and (xi) dynamism. Among the variables under a manager's control, innovation, advertising, market orientation, interorganizational networks, entrepreneurial orientation and managerial capacity serve as positive drivers of organic growth. Older firms and firms operating in dynamic and competitive environments face constraints in terms of organic growth. We find that the omission of marketing variables in empirical models biases the elasticities of eight of the drivers of organic growth. Three study design characteristics impact the magnitude of elasticity of organic growth drivers: using cross-sectional data instead of panel data, using growth rates instead of absolute change as operationalization of growth and using market share instead of sales as a measure of revenues.     

R&;D,Size and Firm Growth in Taiwan‘s Electronics Industry

This paper documents the relationship between R&D, firm size, and growth rate for a panel data of Taiwanese electronics firms. Using GMM method to control for endogeneity of R&D, the main finding is that an increase in R&D induces a higher growth rate and this impact is particularly higher for small firms. Testing Gibrat’s law shows that small firms indeed have a higher growth rate than their larger counterparts, while size is independent with firm growth in the group of large-sized firms, supporting the weak form of Gibrat’s law.     

The growth and development of Clarke Chapman from 1864 to 1914

Clarke Chapman was the main supplier of leading-edge auxiliary equipment to the British shipbuilding industry before the First World War. Penrose's theory was used to examine the company's growth. The findings of this study show that the ownership structure and the governance of the family-owned firm shaped its growth path. Product expansion driven by financial slack was followed by the development of new capabilities as shipbuilding converted from sail to steam-power. The next phase was geographical and international expansion underpinned by human resource slack. Additional productive opportunities were created by recruiting specialist human resources and pursuing hybrid modes of growth.     

Organic growth and shareholder value: A case study of the insurance industry

This paper examines organic growth and its impact on shareholder value creation. At a conceptual level, organic and external growth are readily defined; yet, at a practical level, decomposing revenue growth into its constituent elements presents methodological challenges. We develop a method to decompose revenue growth into organic growth, external growth, exchange rate effects, and under- or outperformance. Using extensive data from three insurance companies, AXA, Generali and ING, we analyzed the period from 1995 to 2005. Exchange rate effects were of minor importance, unless companies entered markets at inopportune times. Primarily, the findings indicate that only organic revenue growth enhanced shareholder value. Therefore, managers should focus on marketing as a key driver of organic growth to create value.     

The Influence of Entrepreneurial Risk Assessment on Venture Launch or Growth Decisions

Entrepreneurs are thought to engage in riskier behavior than nonentrepreneurs, yet little empirical evidence supports that intuitively appealing notion. We argue instead that differences in information, not risk aversion, may explain the decision to launch or grow a venture. We separately test risk taking propensity and risk assessment. We hypothesize that entrepreneurs will not differ from nonentrepreneurs on risk taking propensity. Additionally, we propose and test a model of risk assessment. The sample size for this exploratory study is n=53 with 30 respondents declaring themselves as entrepreneurs and 23 declaring themselves as nonentrepreneurs. The study’s design is a simulation. Each respondent is provided with data on a potential acquisition that would result in either the launch of a new venture or significant growth for an existing firm. Consistent with the hypotheses, the results show no difference between entrepreneurs and nonentrepreneurs on the risk taking measure. We also find that we can predict entrepreneurial behavior based on risk assessment. We close with a discussion of limitations and directions for future research.     

Firm Growth and Liquidity Constraints: A Dynamic Analysis

Using a large unbalanced panel data set of Portuguese manufacturing firms surviving over the period from 1990 to 2001, the purpose of this paper is to examine whether liquidity constraints faced by business firms affect firm growth. We use a GMM-system to estimate a dynamic panel data model of firm growth that incorporates cash flow as a measure of liquidity constraints and persistence of growth. The model is estimated for all size classes, including micro firms. Our findings reveal that smaller and younger firms have higher growth-cash flow sensitivities than larger and more mature firms. This is consistent with the suggestion that financial constraints on firm growth may be relatively more severe for small and young firms. Nevertheless, the same finding can be interpreted in a different way if we consider the more recent literature which interpret the higher investment/cash flow sensitivity of younger and smaller firm in absence of financial market imperfection as the outcome of these firms reaction to the fact that realisation of their cash flows reveals them the direction to go in presence of uncertainty of their growth prospect. Besides, firms that were small and young at the beginning of the sample period exhibited more persistent growth than those that were large and old. Finally, these results have significant policy implications.