The determinants of growth for SMEs. A longitudinal study from French manufacturing firms

Nadine Levratto, Luc Tessier and Messaoud Zouikri

No 2010-28, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: This paper investigates the structural and strategic determinants of firm growth using a unique data set for French firms employing between 10 and 250 employees in 1997 and active over the period 1997-2007. Starting from the idea that firm growth is not only a random process but that some regularities may be emphasized, we consider a growth model that combines different elements presented as determinant in the firm’s growth path. Results based on two families of multinomial logit model do not confirm the conclusions about the exclusive role played by the previous size. In addition, thanks to the references to legal structure, market share and localization, one observes these variables shape strongly the individual growth path. However environment and structural elements are not the only elements to focus on in order to provide an explanation of the employment growth rate at the firm level. Strategic factors matter too. In particular we demonstrate the crucial role of labor costs and financial structure as explanatory variables of firm growth.

Keywords: Firm growth; SMEs; Gibrat’s law; French manufacturing; multinomial logistic regression (search for similar items in EconPapers)
JEL-codes: C1 D22 L25 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2010
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ent and nep-sbm
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2010-28

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